Nvidia’s (NASDAQ:NVDA) upcoming quarterly results on August 27 are likely to be another “positive catalyst” for investors as use cases for artificial intelligence continue to rise, Wedbush Securities said.
“We believe next week’s Nvidia earnings is another positive catalyst that will further remind investors this is still only the bottom of the 2nd inning in the 9 inning game around building out the AI Revolution over the coming years to enterprises/consumers globally,” analysts at the firm wrote in a note to clients. “For now, AI is being driven by a handful of U.S. Big Tech players spending almost $350 billion on Cap-Ex this year, with now the cavalry coming as more enterprises and governments from around the world get into the AI spending game.”
A consensus of analysts expect Nvidia to earn $1.01 per share on $45.92B in revenue for the coming quarter.
Nvidia, along with other high-beta technology stocks, such as Palantir (PLTR) and AMD (AMD), sold off sharply on Tuesday. Despite that round of profit taking, Wedbush said the use cases of AI are only just starting to “massively expand” as more companies realize how much value is being created.
“We view tech sell-offs like yesterday as opportunities to own the core winners and the IVES AI 30 names that will be the 2nd/3rd/4th derivatives of the AI Revolution,” the analysts added.
“Skepticism will persist and on the sell-offs with some volatility the bears will come out of hibernation mode and try to spark more white-knuckle moments … this is a dynamic we have seen play out again and again since January 2023. In our view the tech bull cycle will be well intact at least for another 2 to 3 years given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead.”