Nvidia’s upcoming fourth-quarter earnings report has analysts on edge, with some warning that it could trigger a broader correction not only in equities but also in the crypto market.
According to Singapore-based QCP Capital, if Nvidia fails to meet the high expectations set by Wall Street, it could halt the ongoing rally in both stocks and cryptocurrencies. Nvidia’s position as a major component of the S&P500 Index means its performance could heavily influence the broader market sentiment.
The GPU giant, known for its chips essential for the AI revolution, is slated to release its earnings after the US market closes. With Nvidia’s stock up nearly 220% in the past year, investors are closely watching to see if it can sustain this remarkable growth trajectory.
Nvidia’s current price-to-earnings (P/E) ratio stands at a staggering 90x, compared to Amazon.com’s 52.4x and Tesla’s 57.7x, indicating a lofty valuation. Analysts caution that any disappointment in the earnings report could lead to a sell-off, impacting not only equities but also crypto prices.
Moreover, Nvidia’s influence extends to the cryptocurrency market, particularly in the realm of AI-related tokens like Ocean Protocol’s OCEAN and Fetch.AI’s FET. As Nvidia shapes the sentiment of the AI industry, crypto traders are closely monitoring its outlook and adjusting their trades accordingly.
Analysts also highlight Nvidia’s reliance on the server industry, a crucial component of the AI revolution. While the global PC market faces short-term challenges, projections suggest a rebound driven by factors like AI integration and data center growth.
Despite recent stock declines, Wall Street analysts maintain a bullish outlook on Nvidia, with a majority recommending a buy rating. However, the uncertainty surrounding the upcoming earnings report has implications not only for Nvidia investors but also for the broader market and cryptocurrency traders alike.
