This Tuesday, November 21, global tech companies NVIDIA, Baidu, and HP are scheduled to report their quarterly earnings and reveal how they’ve fared in the face of multiple economic hurdles and uncertainties.
Here’s what you can expect from tomorrow’s earnings releases and what this might mean for the financial markets and the economy:
NVIDIA Earnings: Will the Chip Giant Sustain Its Growth?
Chip giant and AI leader, NVIDIA (NVDA) is scheduled to report its earnings tomorrow after market close. It is no secret that the company had an ostensibly stellar performance this year as it soared by a whopping 244% since the beginning of 2023, made numerous headlines for it, and was even deemed the S&P 500’s (USA 500) best performer in 2023.
While a myriad of factors could’ve played a role in driving these remarkable gains, a prominent catalyst appears to be the noteworthy recognition of NVIDIA's strides in Artificial Intelligence (AI).
While the AI hype has been more prominent recently, NVIDIA’s AI efforts are not as recent. For example, back in 2006, NVIDIA developed the Cuda software toolkit, which is considered one of the company’s significant AI products, and in 2022, NVIDIA launched its generative AI accelerators that have swiftly captured market share, outpacing competitors that are still in the developmental stage.
In line with this growth, many analysts are bullish on NVIDIA’s earnings and expect the company to report an Earnings Per Share (EPS) of $3.10 and a revenue of $14.89 billion which is higher than the year-ago quarter’s EPS of 58 cents and revenue of $5.93 billion.
Nonetheless, despite these positive figures and rosy predictions, it is important to keep in mind that there are multiple factors that could shift the trajectory of NVIDIA’s stock like rising competition, macroeconomic changes, and more.
Baidu: Chinese Tech Giant on a Slump?
Chinese multinational tech company, Baidu (BIDU) is scheduled to report its earnings on Tuesday before market open. The company, which notably had a volatile year, has lost 9.2% of its value since the start of 2023. Furthermore, on Thursday, October 19, Baidu’s stock “was battered” as it dropped by about 6% that day mainly due to price cuts from JPMorgan Chase (JPM) and Goldman Sachs (GS) analysts.
These drops are only a continuation of the falls the company experienced last year whereby its earnings growth was -33.01% and its revenue growth was -4.85%.
As for tomorrow’s report, according to Zacks Consensus Estimate, some analysts expect an EPS of $10.57 and a revenue of $18.63 billion. If these predictions materialize, then it would be a +23.77% EPS change and +1.93% revenue change compared to last year, which would highlight the potential for growth and a rebound.
HP: Is Consumer Demand Weighing Down on HP?
The American multinational information technology company, HP (HPQ), is poised to unveil its financial results tomorrow after the closing bell.
This announcement will provide insight into the company's performance throughout a turbulent year marked by fluctuations and an ultimate increase in value of 5.7% since the beginning of 2023.
HP, like many other companies, has had its fair share of challenges this year, mainly due to a drop in consumer demand for PCs due to inflation, recession fears, and a post-COVID return-to-office wave. In addition, sales in the company’s printing section are also believed to have softened in light of weaker demand.
Still, in spite of these drops, it is believed that tomorrow’s earnings will likely show the benefits of the company’s “favorable pricing, disciplined cost management, and a better product mix.”
The Zacks Consensus Estimate for earnings is set at 90 cents, which would be an improvement of 5.9% compared to the same quarter last year, while revenues are projected at $13.68 billion, signaling a 7.6% decrease from the previous year's quarter. Only time will tell what this company’s earnings will reveal. (Source: Yahoo Finance)
In summary, as NVIDIA, Baidu, and HP release their quarterly earnings on November 21, expectations vary and traders will have to wait and see what tomorrow reveals about these tech leaders.