Spotlight On Nvidia, Walmart, Palo Alto Networks And CAGNY Conference

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Investors will not have much in the way of economic data to wade through next week after a wave of conflicting reports on GDP, jobs, retail sales, and CPI inflation did little to settle the debate about whether the economy is more at risk of overheating or drifting into a recession. However, heavyweight earnings reports from Nvidia (NVDA) (preview) and Walmart (NYSE:WMT) could impact sentiment broadly in their respective sectors. Nvidia is up more than 45% on a year-to-date basis and is the AI superstar of the year, while Walmart is being tagged as one of the better defensive plays of the year. Walmart also has a three-for-one stock split that will become effective at the close of trading on Friday. Other notable earnings reporters include Home Depot (HD) (analysis), Caesars Entertainment (CZR), Palo Alto Networks (PANW) (preview), Analog Devices (NASDAQ:ADI), and Etsy (ETSY). The conference schedule features the retail-focused CAGNY Conference and the Citi Global Industrials Conference. In the crypto sector, expect more buzz about the Bitcoin halving event that is expected to occur in May to reduce the reward for Bitcoin mining by half. The first Bitcoin halving occurred in November 2012, followed by halving events in July 2016 and May 2020. Bitcoin typically trades with increased volatility in the months ahead of the halving event.

Earnings spotlight: Tuesday, February 20 – Walmart (WMT), Home Depot (HD), Caesars Entertainment (CZR), Palo Alto Networks (PANW), and Medtronic (MDT). See the full earnings calendar.

Earnings spotlight: Wednesday, February 21 – Analog Devices (ADI), Nvidia (NVDA), Etsy (ETSY), Rio Tinto (RIO), Marathon Oil (MRO), Rivian Automotive (RIVN), and Lucid Group (LCID). See the full earnings calendar.

Earnings spotlight: Thursday, February 22 – PG&E (PCG), Dominion Energy (D), Moderna (MRNA), Intuit (INTU), Booking Holdings (BKNG), Wayfair (W), and Carvana (CVNA). See the full earnings calendar.

Earnings spotlight: Friday, February 23 – Warner Bros. Discovery (WBD), Bloomin’ Brands (BLMN), and Ameren (AEE). See the full earnings calendar.

Volatility watch: Options trading volume is elevated on Digital World Acquisition Corp. (DWAC) and SunPower Corporation (SPWR). Meanwhile, Fisker (FSR), Beyond Meat (BYND), and C3.ai (NYSE:AI) are still near the top of the list of stocks with the highest level of short interest. The most overbought stocks per their 14-day relative strength index include Super Micro Computer (SMCI), Beamr Imaging (BMR), and BioLargo (OTCQB:BLGO). The most oversold stocks per their 14-day Relative Strength Index include SSR Mining (SSRM), AN2 Therapeutics (NASDAQ:ANTX), and QuidelOrtho (QDEL).

IPO watch: Singapore-based ride-hailing company Ryde Group (RYDE) is expected to start trading next week in an IPO slated to being in $12M to $15M. The IPO lockup period expire on certain blocks of shares of Foremost Lithium Resource & Technology (FMST). The analyst quiet periods expire on CG Oncology (CGON), ArriVent BioPharma (AVBP), Morgan Stanley Direct Lending Fund (MSDL), Autonomix Medical (NASDAQ:AMIX), Haoxi Health Technology (HAO), BrightSpring Health Services (BTSG), Planet Image International (YIBO), and SU Group (SUGP) to free up analysts to post ratings. Of the group, CG Oncology has seen the biggest share price gain since going public.

Dividend watch: Companies forecast to increase their quarterly dividend payouts include Sturm, Ruger (NYSE:RGR) to $0.27 from $0.17, NXP Semiconductors (NXPI) to $1.25 from $1.01, Olympic Steel (ZEUS) to $0.15 from $0.13, Analog Devices (ADI) to $0.95 from $0.86, and Universal Display (OLED) to $0.40 from $0.35. Read through some of the dividend stock picks from Seeking Alpha analysts.

Nvidia earnings preview: Nvidia (NVDA) will report earnings on February 21 with red-hot sentiment still very much in play. The consensus estimates at the time of publication were for revenue of $20.4B and EPS of $4.57 to be reported, but both marks have been trending higher as revisions pile in. Bank of America previewed that apart from the earnings numbers, investors may begin to focus on the company’s flagship GPU Tech Conference on March 18-21 where it is likely to showcase its pipeline and perhaps update the prior $250B annual AI accelerator total addressable market forecast. The update from Nvidia on pricing, AI demand, cloud capex growth, and the data center market outlook will also be closely watched. Nvidia is still a darling on Wall Street, with 49 out of 53 firms covering the stock having a Buy-equivalent rating or higher. However, Seeking Alpha analyst Paulo Santos is a little more cautious on the chip giant’s earnings. He warned that Nvidia’s exhaustion of its backlog seems set to happen two to three quarters into the future based on a recent report from UBS indicating that Nvidia turned an 8-11 month backlog into a 3-4 month backlog in just 3-4 months. “Nvidia’s consensus doesn’t include any end to the QOQ growth even looking 9 quarters out, hence this event materializing would be quite negative for Nvidia stock,” he noted. The Nvidia (NVDA) earnings conference call is expected to attract quite a bit of attention and could move other names. Investors will be listening for more details on the broad AI ecosystem, a China update as U.S. government restrictions take effect, and the latest on the new ‘work-around’ accelerators (H20, L20, L2, and 4090D) launch. The three tech stocks that correlate the tightest to Nvidia following its earnings report release are Taiwan Semiconductor Manufacturing (TSM), Lam Research Corporation (LRCX), and ASML Holding N.V. (ASML). Options trading implies a share price swing of 7% for Nvidia on the first full trading day after earnings. Nvidia peeled off 2.5% after its last earnings report. On a market capitalization basis, Nvidia (NVDA) is the third most valuable company in the U.S., just ahead of Alphabet (GOOG) and Amazon (AMZN).

Walmart earnings preview: Retail heavyweight Walmart (WMT) will report earnings on February 20. The Bentonville-based company is forecast to disclose revenue of $169.3B, operating profit of $6.74B, a gross margin rate of 23.3%, EPS of $1.64 and free cash flow of $8.58B. Walmart is expected to have continued to offset the impact of moderating inflation benefits with traffic and unit gains during the quarter. On Wall Street, UBS expects Walmart (WMT) to finish 2023 on a strong note, despite the topsy-turvy spending backdrop throughout the holiday quarter. The firm thinks Walmart (WMT) may look even more compelling to investors as several macro uncertainties weigh on retail in the year ahead, such as the uncertain health of the U.S. consumer, food disinflation, wavering demand for general merchandise, the distraction of the U.S. elections, and the elevated interest rate environment. Meanwhile, Evercore ISI issued a negative Tactical Trading Call on Walmart (WMT) ahead of earnings day due to the potential near-term downside from conservative guidance or cautious commentary on consumer spending. On the conference call, Walmart (WMT) management may go into more detail on AI initiatives, fulfillment goals, and more details on the advertising business.

Investor events: The conference schedule heats up in the week ahead, with the CAGNY Conference in Boca Raton, Florida, perhaps the headliner of the bunch. Companies due to present include Coca-Cola (KO), PepsiCo (PEP), Kraft Heinz (KHC), WK Kellogg (KLG), Mondelez International (MDLZ), Philip Morris International (PM), and Coty (COTY). The conference has been used by management teams in the past to talk about long-term strategies. The Citi Global Industrials Conference will also take place next week. The conference will include appearances from companies from a broad range of industries. United Airlines (UAL), Rocket Lab USA (RKLB), and United Rentals (URI) are a few of the companies due to appear. Meanwhile, the Bank of America Securities Financial Services Conference will include participation from MetLife (MET), Apollo Global Management (APO), and Brookfield Asset Management (BAM). Notable investor events include Amgen’s (NASDAQ:AMGN) business update call, Sonoco Products’ (NYSE:SON) Investor Day, and Intapp’s (NASDAQ:INTA) Investor Day.

Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.