Nvidia Corporation’s (NASDAQ:NVDA) upcoming fourth-quarter (Q4) financial report on Wednesday is among the most anticipated of the current earnings season.
Freedom Capital Markets Chief Market Strategist Jay Woods breaks down five key things to watch in the earnings report and the financial results’ impact on the stock, the semiconductor sector, and market indexes.
Nvidia Q4 Earnings
- Analysts expect Nvidia to report Q4 revenue of $65.64 billion, up from $39.33 billion, according to Benzinga Pro.
- The company has beaten analyst revenue estimates for 13 straight quarters.
- Analysts expect Q4 earnings per share of $1.50, up from 89 cents per share in last year's Q4.
- The company has beaten analyst earnings-per-share estimates for 12 straight quarters.
5 Key Items to Watch in Nvidia's Q4 Results
In a weekly newsletter, Woods highlights five key areas to watch for Nvidia’s quarterly financial results.
1. Market Weighting: Nvidia stock is the top stock by weighting in the S&P 500, which is tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) at over 7%.
Nvidia is also a key member of the Dow Jones Industrial Average. Due to price-weighted indexing, the stock is the 18th largest holding in the SPDR Dow Jones Industrial Average ETF (NYSE:DIA). Woods highlights Nvidia being a key component in these two well-known market indexes as volatility in NVDA stock could tilt these indexes and the ETFs that track them later this week.
2. Semiconductors: Nvidia is one of the keys to the semiconductor sector and Woods writes that "as Nvidia goes, so go most of the semiconductor stocks and AI plays." Woods highlights that the semiconductor sector has trailed other sectors over the last two months. "They are the dominant player in the space,” Woods adds. Positive forward guidance combined with continued strong demand “will likely lift the sector."
3. Watch the Momentum: Woods said earnings trends have accelerated for Nvidia in recent quarters as the company grows. "The bar keeps getting higher and the chipmaker keeps exceeding it. Yet, that doesn't equate to a higher stock performance."
Woods said that Nvidia has had strong quarterly results in the past that didn't see the stock rally.
"Watch how the stock trades and closes on Thursday. We have seen the stock gap higher but reverse during the trading day."
The market expert said that over the last five years, there are three periods where Nvidia stock consolidated "in a neutral range for months." That was followed by a breakout for the next several months at the end of 2024, but shares dipped for three months after a similar consolidation trade in 2025.
4. Analyst Ratings: It's tough to find an analyst without a Buy rating on Nvidia stock. Currently, there are 77 buys, 5 holds and 1 sell rating on Nvidia stock ahead of the quarterly results. This could mean expectations are too high for more upside.
Any disappointment could “open the door” for potential downgrades. And a beat may not lead to many price target upgrades, Woods explains.
5. Technical Levels: Woods said there a "huge pocket of consolidation" when looking at price action on Nvidia stock over the last 52 weeks.
"While shares are up 35.5% over the last year, they have been stuck in a sideways range going back to summer and are only up 1.8% year-to-date."
The market expert said the support level for Nvidia stock is around $170 with resistance at $195.
"A break above $195 could lead to a bigger tech rally across the board. If shares can close above this level, watch for a bigger market-wide pop."
For the downside, Woods cautions that a test of the $170 level could see shares go to the $145 to $150 level and have a negative impact on the entire S&P 500.
What's Next for Nvidia Stock
With a shift from tech to value, Woods says market sentiment could be changing and make the earnings from Nvidia even more important.
"Nvidia has been the gold standard and the most ‘magnificent' of all stocks during the majority of hits bull run," Woods said. "Now it leads the ‘Mag 7' with a paltry year-to-date gain of just under 2%."
The market expert said Nvidia continues to hit most its metrics and show growth. He cautions that the reaction to earnings could be "more of a market psychology shift" and less to do with earnings.
"If it can break out, expect much of the market to rally on its coattails. If it remains stagnant, so may the market."
Nvidia Stock Price Action
Nvidia stock is up 0.7% to $191.04 on Monday versus a 52-week trading range of $86.63 to $212.19.
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