"All eyes are on Nvidia, the bellwether for the AI industry, as analysts and investors hope the chipmaker's third-quarter earnings assuage concerns about whether the high-flying valuations of AI firms have peaked. A great deal will ride on how confident Nvidia's chief executive, Jensen Huang, appears in his forward-looking guidance. Analysts and experts say that although they are largely confident Nvidia will beat Wall Street expectations, they are anxiously awaiting news on the status of industry demand for the firm's AI chips."
"There is still no doubt that Nvidia is far and away the leader for AI-focused chips, David Meier, senior analyst at investment website the Motley Fool, wrote. So, I expect revenue, margins, and cash flows to be pretty close to analysts' estimates. But the valuable information is more likely to come from the commentary about where management sees its markets headed, whether it's in the AI market or [a] new market the company is currently pursuing."
"Shares in Nvidia have been down 7.9% in November after major investors dumped their stocks in the firm. Peter Thiel's hedge fund, Thiel Macro, sold off its entire stake in the chipmaker in the last quarter. His holdings would have been valued at about $100m, according to a Reuters report. Softbank has also sold off its $5.8bn holdings in the company, further boosting fears of an AI bubble."
Nvidia's third-quarter earnings and forward-looking guidance will serve as a key indicator of industry demand for AI chips and the health of AI firm valuations. Analysts largely expect Nvidia to beat Wall Street estimates, but they seek clearer signals about future AI-chip demand from management commentary. Nvidia remains the dominant provider of AI-focused chips, with revenue, margins, and cash flows anticipated to be close to estimates. Recent large sell-offs by major investors, including Peter Thiel's fund and SoftBank, have driven a November share decline and intensified concerns about a potential AI bubble.
Read at www.theguardian.com
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