The Daily Breakdown takes a closer look at Nvidia’s growth over the last few years, as revenue and earnings have powered higher.
Tuesday’s TLDR
- It’s a big day of earnings
- Nvidia’s strong growth
- HIMS shares jump
What’s Happening?
Before we dive in, let’s make sure you’re set to receive The Daily Breakdown each morning. To keep getting our daily insights, all you need to do is log in to your eToro account.
At one point, the SPY ETF was down 1% yesterday, while the QQQ was down 1.4%. However, both finished near flat on the day, as a lack of negative trade headlines has helped lure investors back into the markets.
Today we’ll get the JOLTS report and consumer confidence report at 10 a.m. ET.
JOLTS will be a key labor market indicator for investors. Remember, many companies are taking a wait-and-see approach right now. Will that materialize into fewer job openings?
The other report — consumer confidence — has continued to move lower for months now. Has it found a trough or will the vibes take another hit due to macro and tariff concerns? Remember, we want a confident consumer, not a worried one.
As for earnings, it’s been a busy morning. We’ve heard from SoFi, PayPal, UPS, Coca-Cola, Royal Caribbean and Spotify.
Tonight, companies like Visa, Starbucks, Snap, and First Solar will report.
Want to receive these insights straight to your inbox?
The Setup — Nvidia
Many look at Nvidia as the face of AI, but by the way the stock has been trading, some may think its days as the leader are numbered.
It’s true that Nvidia faces a trade landscape where its products may not only be subject to ever-changing tariffs, but can be outright banned to certain countries (like China). Despite the headline risk though, the firm continues to do well.
Consider the chart below, which shows revenue in orange and net income in blue. These figures exploded higher over the last two years, accompanying NVDA’s stock price rise.
But what stands out to me is operating margin. Notice how even during good years, this figure stalled out in the mid-30% range. Now? It’s clocking in above 60%. In other words, a significantly larger portion of revenue is making it down to the bottom line as profit.
This is a good look-back at what Nvidia has done, but what about going forward? Estimates are just estimates and can always change, but as it stands, analysts expect about 54% revenue growth and 50% earnings growth this fiscal year.
Options
Investors who believe shares will move higher over time may consider participating with calls or call spreads. If speculating on a long-term rise, investors might consider using adequate time until expiration.
For investors who would rather speculate on the stock decline or wish to hedge a long position, they could use puts or put spreads.
To learn more about options, consider visiting the eToro Academy.
What Wall Street is Watching
HIMS – Hims & Hers Health stock is soaring this morning, up about 30% in pre-market trading. According to StockTwits, shares are “trending due to a new partnership with Novo Nordisk to offer Wegovy, a high-demand weight-loss drug, through its platform. This is fueling discussion about the company’s expansion into chronic care and potential for significant growth, while others express skepticism about pricing.”
ETH – Shares of Ethereum are creeping higher, alongside an increase in Bitcoin. Both cryptocurrencies did well last week, rising by more than 10%. However, bulls are hopeful that ETH can make a charge back toward $2,000. Check out the chart for ETH.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.