Nvidia on Watch

Tech stocks are on watch today as traders brace for the latest earnings from AI chipmaker Nvidia. Fears over the health of the US economy as well as disappointing results from other AI companies put a temporary end to the bumper rally which had been in place across the first half of the year. Ballooning AI optimism over the first half of the year saw Nvidia’s share price soar by almost 200% as traders favoured the stock, given its leading role in supplying the AI industry with software chips. However, that optimism proved over-done into the summer as traders were left underwhelmed by some other big names in the AI space. However, despite the subsequent pull-back as traders mulled the risks around AI investments, the stock has since bounced back and is almost back at highs ahead of today’s results.

Expectations For Today

On the numbers front, the market is looking for EPS of $.645 on revenues of $28.737 billion. If seen, this will mark a firm jump from the prior quarter and should give the rally fresh legs. Indeed, Goldman Sachs is warning today of the potential for a violent upswing in the stock if results come in above expectations. Given the bullish sentiment gripping the stock currently, Goldman points to positioning in the options market as creating ripe conditions for a strong move higher if data surprises today.

Technical Views

Nvidia

The rally off the 97.31 level has seen the market breaking back above the 117.01 level, trading back up into the middle of the bull channel. While above 117.01 and with momentum studies bullish, the focus is on a continuation higher and a test of the 141.21 highs next, with sights set on a fresh break higher.