All eyes on it! Will NVIDIA's performance, highly praised by Wall Street, become the key to the success or failure of the US stock market?

Zhitong App has learned that NVIDIA will announce its fourth-quarter earnings for the 2024 fiscal year on February 22nd Beijing time. Several Wall Street banks are predicting that this chip giant's performance will exceed expectations and show growth.

Analysts from Wedbush Securities, led by Dan Ives, wrote in a report to clients, "Wall Street generally expects NVIDIA's performance to once again significantly exceed expectations and show growth, all due to the speed of spending in data center artificial intelligence, as NVIDIA's GPU is the only choice for running generative AI applications."

Wedbush added that NVIDIA's performance is seen as "critical" in the tech industry and the broader market, emphasizing the trajectory of GPU orders and enterprise demand.

Rosenblatt Securities analyst Hans Mosesmann also stated that he expects NVIDIA's performance to exceed expectations and show growth, citing strong product momentum in areas such as Hooper, Grace Hopper, networking, and software.

Mosesmann noted that NVIDIA's stock price has risen by over 50% so far this year, far outperforming the semiconductor market's 10% increase, possibly because Wall Street is realizing that NVIDIA's AI strength is "an increasingly difficult-to-understand long-term driver" compared to previous cycles like gaming or cryptocurrency.

Ahead of NVIDIA's quarterly earnings announcement and next month's GTC event, Mosesmann reiterated his "buy" rating on NVIDIA with a target price of $1100.

Currently, analysts generally expect NVIDIA's Q4 revenue to reach $20.54 billion, with earnings per share of $4.63.

NVIDIA's Performance May Lead the U.S. Stock Market

As the artificial intelligence boom continues, NVIDIA, as a leader, currently has a market value approaching $1.8 trillion, making it the third-largest U.S. company after Microsoft (MSFT.US) and Apple (AAPL.US), surpassing Tesla (TSLA.US) to become the most traded stock in the U.S. This further demonstrates investors' emphasis on AI-related bets.

Data shows that in the past 30 trading days, NVIDIA's average daily trading volume has been around $30 billion, surpassing Tesla, which averaged $22 billion per day during the same period. It is understood that since 2020, Tesla has consistently been the most traded stock in the U.S., with daily trading volumes exceeding $35 billion multiple times. In comparison, Apple's recent daily trading volume is around $10 billion.

This has made NVIDIA's performance one of the most anticipated events on Wall Street. If the chipmaker's revenue growth fails to meet investors' high expectations and disrupts the bullish trend in the US stock market driven by the optimism brought by artificial intelligence, NVIDIA's significant share in daily stock trading may make investors more vulnerable.

Some strategists believe that without an explosive performance, NVIDIA's current uptrend, following a 40% surge this year, may reverse.

Analysts at Bank of America stated that due to the intertwining of "fear, greed, and blind pursuit of all things related to artificial intelligence by investors," NVIDIA's stock price has been skyrocketing parabolically.

Bulls remain optimistic about NVIDIA, expecting Q4 revenue to reach $21.7 billion, 9% higher than market expectations. Bank of America analyst Vivek Arya pointed out that due to the high market expectations, it has become more challenging for NVIDIA to surpass market expectations, which could lead to an 11% fluctuation in the company's stock price after the earnings report is released.

Independent stock market analyst Michael Kramer stated that NVIDIA's earnings report could be crucial to the market's success or failure.

He said, "I believe the market has placed a huge bet on NVIDIA. If NVIDIA's stock price does not rise significantly, there will be no other factor to drive the US stock market higher."