Nvidia guidance will be crucial for tech bulls. (0:25) Fed's favorite inflation gauge looks more benign than CPI. (2:18) Warren Buffett assures investors on cash pile. (3:07)Show NotesGoldman Sachs' Rising Stars ListEarnings CalendarDividend RoundupEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Full Episode
Welcome to Seeking Alpha's Wall Street Brunch, our Sunday look-ahead to this week's market-moving events, along with the weekend's top news and analysis. Hello, today is Sunday, February 23rd, and I'm your host, Kim Kahn. This is a test. For the next few sessions, the stock market will be conducting a test of the AI rally. This is only a test.
Will NVIDIA give the bulls a much-needed jolt of belief as macro worries gain a stronger grip on action? We'll find out when the chipmaker reports earnings on Wednesday. Analysts expect NVIDIA to report EPS of $0.85 on revenue of $38.15 billion. There have been six upward analyst revisions to the bottom line going into the report, with two down.
The top line has seen seven upward revisions and two to the downside. Viktor Derganov, who runs the financial profit investing group on Seeking Alpha, says the top line number will be especially important here as the market will look for signs of continued growth, specifically in the lucrative enterprise AI GPU segment.
While NVIDIA guided to only $37.5 billion in sales for Q4, NVIDIA often sandbags its forecasts, making it easier to provide better-than-anticipated results. So $38-39 billion in sales with a small beat on profit wouldn't be a surprise, he said.
Guidance will be crucial in the wake of DeepSeek, but despite high expectations, NVIDIA can deliver another constructive earnings report, which should support its stock price trajectory and the trajectory of other high-quality AI picks, he concluded. Key bank capital markets are expecting a strong report that will solidly beat forecasts and provide higher, albeit conservative, guidance.
DeepSeek's recent announcement concerning its latest AI product has led to a spike in demand for NVIDIA's H20 GPUs in China, analysts added. Shares of Nvidia are barely higher year-to-date, but are up 15% from their low at the beginning of the month. Also on the earnings calendar, Public Storage, Trip.com, Zoom Communications, and SBA Communications report on Monday.
Home Depot, Intuit, Workday, and Keurig Dr. Pepper weigh in on Tuesday. Joining NVIDIA on Wednesday are Salesforce, Lowe's, TJX, and Stellantis. Thursday brings HP, Rocket, Warner Bros. Discovery, and NetApp. EOG Resources chart industries and AES issue numbers on Friday.
On the economic front, the highlight of the week will be the Fed's favorite inflation gauge, which is expected to show a more benign picture of price pressure than the January CPI. The January core PCE price index hits Friday, and economists expect a 0.3% rise on the month, cutting the annual rate to 2.6%.
Wells Fargo economists say inflation progress is slower going, but it hasn't necessarily gone into reverse. David Rogel, lead portfolio manager of the BlackRock Total Return Fund, says, We think the recent FOMC rate cuts were part of a recalibration cycle to adjust policy rates down with inflation so as not to cause a passive tightening in monetary policy.
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