Nvidia's Earnings Report Set to Dominate Wall Street's Attention Amid Market Volatility

Nvidia's Jensen Huang and new inflation data may rock the markets

When Federal Reserve Chairman Jerome Powell said the time had come to start cutting interest rates, one could almost hear the cheering from one side of the United States to the other. Stocks soared in reaction to Powell's speech. Interest rates went down. Gasoline prices fell, too, and most people ignored that oil prices were up on Friday. It was a good day. While the vibe, as it were, was benign going into the weekend, one could still see that things could get unraveled. Related: Analysts revise Target stock price estimates after earnings To emphasize the point, Israel early Sunday attacked Hezbollah positions in southern Lebanon. Information on casualties and deaths was not available at 12 a.m. ET Sunday. It's not clear how the attacks and other fighting might affect global markets on Monday. The geopolitical situation adds more tension to an undercurrent of unease that continues with layoffs coming in many companies, including technology and lengthening lists of small business bankruptcies. The U.S. presidential and national election campaigns will swing into high gear over the Labor Day Weekend. In addition to the Middle East worries, the Ukraine-Russia War could become more dangerous than it already is. Meanwhile, here is what to keep an eye on this week for markets. Watch the PCE report The Fed started what seemed like an era of good feelings last week with the Aug. 21 release of minutes from its July meeting. Normally, these are drab, wonky documents. This one stated clearly that interest rate cuts were on the Fed's mind in a big way. On Aug. 30, the Commerce Department's Bureau of of Economic Analysis will release its July report of the Personal Consumption Expenditures Price Index. This measures price changes of the good and services consumers buy and use. It has fewer idiosyncrasies than the Consumer Price Index, and the Fed governors and staff prefer it. In June, the PCE showed the index rising 2.5% from a year earlier. The consensus estimate is for a 2.4% change, maybe a little less. Gasoline prices are lower. So are interest rates and some food prices. If the PCE report shows a sudden jump, markets will behave badly, and the Fed, ever data-dependent, may have to react. More on markets Nvidia will dominate the investor talk Nvidia (NVDA) , the developer of graphical processing units that are at the heart of artificial intelligence applications, is the star of the week. It reports its fiscal-second quarter earnings after the Wednesday close. Nvidia shares are up 161.2% in 2024, based on Friday's close of $129.37. Its market cap of $3.182 trillion is now second among U.S.-based companies, behind Apple's (AAPL) $3.45 trillion market capitalization. Microsoft's (MSFT) $3.01 trillion market cap is third. Nvidia is expected to report 64 cents a share, up an astonishing 156% from the 25 cents a share reported a year ago. Revenue is projected at $28.6 billion, up 110% from a year earlier. The reason is that everyone involved in developing applications that use AI can't get enough of Nvidia's Hopper GPUs and, they hope, the new Blackwell family of GPUs. The difference: The average Hopper GPU has 80 billion transistors. The average Blackwell GPU has 208 billion transistors. There is an issue and a risk: Blackwell GPUs were supposed to be available at the end of the year. Now, according to The Information and other sources, the products won't be available until March 2025 because of design flaws. The problem will affect the plans of Microsoft, Facebook-parent Meta Platforms (META) and Google-parent Alphabet (GOOGL) . All have said they are prepared to spend billions of dollars on the GPUs and the related pieces of the units to get ahead. So far, the reports haven't affected the stock price. But analysts will surely ask about the Blackwell GPUs on the conference call after the earnings report is released. Don't forget CrowdStrike CrowdStrike (CRWD) , the big cybersecurity company, would probably prefer if no one notices their they release their earnings literally at the same time as Nvidia. That's because a flawed update that it sent out in July to clients' networks built on Microsoft software caused computer outages across the globe. Among the hardest hit were airlines, especially Delta Air Lines (DAL) , which couldn't get the disruptions fixed for several days. Television reports showed stranded passengers camped out near Delta ticket counters at airports across the country. So far, it's not clear if CrowdStrike faces any financial liability from the computer disruptions. CrowdStrike is expected to report fiscal second-quarter earnings of 97 cents a share, up 31% from a year ago. Revenue is projected at $958.6 million, up 30% from $731.5 million a year earlier. Between the computer outage and the market selloff in late July and early August, the stock has had a volatile summer. The shares fell 49.7% between a $393.33 intraday peak on July 9 to an Aug. 5 intraday low of $200.81. It's up 35% since and up 6.4% for the year. Despite all the volatility, only one of the 50 analysts who cover the company rates it a sell, with two giving it an underweight rating. Thirty-two rate the shares a buy. Eight rate it a hold. Related: Uber robotaxi push may be next step in sinister pattern Wednesday: Dow component Salesforce (CRM) . Estimate: $1.73 a share, up from $1.63. HP Inc. (HPQ) . Estimate 86 cents, unchanged from a year ago. Netapp NTAP. Estimate $1.15, up from 84 cents a year ago. Thursday: Server maker Dell Technologies (DELL) . Estimate $1.49, up from $1.44. Chip-maker Marvell Technology (MRVL) . Estimate: 13 cents, down from 18 cents a year ago. Fashion retailer Lululemon Athletica (LULU) , Estimate: Estimate 2.94, up from $2.68. Related: Veteran fund manager sees world of pain coming for stocks

Nvidia will be in the spotlight next week as Wall Street wraps up a tumultuous August

This year's market darling will once again take center stage in the week ahead. Nvidia's hotly-anticipated fiscal second-quarter results are on deck Wednesday , coming at the end of what has been an eventful summer for the stock. After blowing past record after record in 2024 -- topping $140 per share on an intraday basis in June -- the AI chipmaker started this month by pulling back in a major way. On Aug. 5, Nvidia shares fell to as low as $90.69 per share amid a broader market sell-off, as well as reports of delays on its Blackwell chips. Now, they've surged more than 40%, to about $125 per share currently, as traders rushed in to buy the dip. NVDA YTD mountain Nvidia Wall Street is bullish heading into Nvidia's earnings results next week, figuring any hiccups to its next generation AI chips does little to dim the earnings potential of a company that essentially has a monopoly on the market. "Nvidia is in this enviable position where they make the best of the best chips," said Harsh Kumar, senior research analyst at Piper Sandler, who has a buy rating and a $140 price target on the stock. "And the Blackwell is even superior to the previous generation -- massively superior to previous generations." In fact, CEO Jensen Huang told CNBC's Jim Cramer in March the newest generation of its chips cost around $10 billion in research and development, a huge barrier to entry for any viable competitors. Still, Kumar expects the results may do little to move the stock or the broader market given the high expectations ahead of the results. Nvidia, which has previously beat estimates by about $2 billion , may beat by just shy of that number as it contends with delays, Kumar said. "As long as Nvidia, in its commentary, is able to convince people that business is not going away to somebody else, ... the stock should hold," Kumar said. "Could be flat, but it should definitely hold its value." Regardless, investors may not need much convincing holding onto their positions in the hot stock, which is higher this year by more than 160%. Louis Navellier, chairman and founder of Navellier & Associates, said: "I'm all in on Nvidia. I made 1,000% in it years ago. I got out. I got back in by May 10, of 2019, so I'm up 3,000% the second time. And I don't plan to sell this thing at all." PCE The July personal consumption expenditures price index (PCE) next Friday could serve as further confirmation the Federal Reserve is well on its way to its 2% inflation objective, as the central bank readies to cut rates in September -- which Chair Jerome Powell on Friday indicated in his Jackson Hole speech. "The time has come for policy to adjust," Powell said. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks." Economists polled by FactSet anticipate PCE to show increases of 0.2% month on month and 2.6% from the year-earlier period. That's compared to increases of 0.1% and 2.5% in the prior reading, respectively. A softer inflation print could add to confidence investors can turn their attention to the labor market, such as next month's jobs report, which could determine whether the Fed lowers rates by a quarter- or half-percentage point in September. The CME FedWatch Tool shows markets are currently pricing in the likelihood the key overnight lending rate will fall one percentage point by the end of the year to a range of 4.25%-4.5%. End of summer In spite of the tumult to start August, the major averages are set to close out a winning month. As of midday Friday, the S & P 500 and Nasdaq Composite were higher by more than 1%, each, month to date. The Dow Jones Industrial Average had gained 1%. Wall Street anticipates that stocks could go higher from here, though the road from now to the end of the year could be bumpy. Not only are investors about to start a seasonally weak month for stocks, they're heading into the U.S. presidential election, as well as ongoing geopolitical risks around the globe. "I think the path of least resistance is still up, assuming the Fed still cuts rates," David Miller, chief investment officer at Catalyst Funds. "I think the bigger question is, maybe, is there some other event that comes out of the blue." Miller said he will be monitoring how the presidential candidates Vice President Kamala Harris and Former President Donald Trump will outline their economic policies. He's also keeping an eye on how the Russia-Ukraine war could impact the price of oil. Elsewhere, investors will get some August consumer sentiment data next Wednesday. Other notable earnings results include tech names Salesforce and CrowdStrike, as well as consumer names such as Campbell Soup, Dollar General and Ulta Beauty. Week ahead calendar All times ET. Monday Aug. 26 8:30 a.m. Durable Orders (July) 10:30 a.m. Dallas Fed Index (August) Tuesday Aug. 27 9 a.m. FHFA Home Price Index (June) 9 a.m. S & P/Case-Shiller Home Price Indices (June) 10 a.m. Consumer Confidence (August) 10 a.m. Richmond Fed Index (August) Wednesday Aug. 28 No notable economic data. Earnings: Nvidia , Bath & Body Works , J. M. Smucker , Salesforce , CrowdStrike , NetApp , HP Thursday Aug. 29 8:30 a.m. Continuing Jobless Claims (08/17) 8:30 a.m. GDP second preliminary (Q2) 8:30 a.m. Initial Claims (08/24) 8:30 a.m. Wholesale Inventories preliminary (July) 10 a.m. Pending Home Sales Index (July) Earnings: Campbell Soup , Best Buy , Dollar General , Autodesk , Ulta Beauty , Lululemon Athletica Friday Aug. 30 8:30 a.m. PCE Deflator (July) 8:30 a.m. Personal Consumption Expenditure (July) 8:30 a.m. Personal Income (July) 9:45 a.m. Chicago PMI (August) 10 a.m. Michigan Sentiment final (August)

Nvidia's blockbuster earnings, CrowdStrike on the hot seat, and PCE inflation watch

Welcome to Seeking Alpha's Catalyst Watch - a breakdown of some of next week's actionable events that stand out. Check out Seeking Alpha's earnings calendar for a full list of companies due to report. Monday - August 26 Volatility watch - Options trading volume is elevated on Sana Biotechnology (SANA) and Clover Health Investments (CLOV). The most overbought stocks per their 14-day relative strength index include BAIYU Holdings Inc (BYU), Nutex Health (NUTX), and U-BX Technology (UBXG). The most oversold stocks per their 14-day Relative Strength Index include Verrica Pharma (VRCA), Tela Bio (TELA), and Westrock Coffee (WEST). Short interest has moved higher on Longeveron (LGVN) and Lucid Group (LCID). Trump Media & Technology Group (DJT) will be watched closely, with Donald Trump less than a month away from being able to sell part of his 60% stake in the company. The stock is down 40% over the last six months. Earnings watch - Notable companies due to report include BHP Group (BHP), Heico (HEI), and Trip.com (TCOM). All day - The three-day VMWare Explore event will begin in Las Vegas. Broadcom (AVGO) CEO Hock Tan will address VMware Explore attendees during the general session keynote titled "Shaping the Future of Cloud and AI Innovation." The event has been used to announce strategic partnerships in the past. All day - The Nasdaq short interest report will be released. 8:30 a.m. The July Durable Goods Order report will be released. Tuesday - August 27 Earnings watch - Notable companies due to report include Bank of Montreal (BMO), Bank of Novia Scotia (BNS), PVH (PVH), and Box (BOX). Options trading implies a double-digit share price swing for Workhorse Group (WKHS) after the release of its delayed earnings report. All day - Littelfuse (LFUS), Nova (NVMI), MaxLinear (MXL), and Diodes (DIOD) are some of the companies that will participate in the Evercore ISI Semiconductor, IT Hardware & Networking Conference. Wednesday - August 28 Earnings watch - Notable companies due to report include Nvidia (NVDA), Salesforce (CRM), Royal Bank of Canada (RY), Crowdstrike (CRWD), HP (HPQ), Okta (OKTA), J.M. Smucker (SJM), Foot Locker (FL), and Pure Storage (PSTG). Options trading implies a double-digit share price swing for Affirm (AFRM) and Chewy (CHWY) after their reports are released. All day - The HSR review period by the Federal Trade Commission for Boeing's (BA) acquisition of Spirit AeroSystems (SPR) is set to expire. All day - Super Micro Computer (SMCI), AMD (AMD), Micron (MU), Microsoft (MSFT), Expedia (EXPE), Mastercard (MA), and Visa (V) are some of the companies that will participate in the two-day Deutsche Bank Technology Conference. 5:00 p.m. CrowdStrike (CRWD) will host a conference call to discuss its financial results. Analysts expect more details from CrowdStrike management about the impact of the faulty software update that caused global outages. 5:00 p.m. Nvidia (NVDA) will hold its earnings conference call. Options trading implies an 8% share price move after the report. Shares rallied 9% the day after the last earnings report. The stocks with the highest trading correlation to Nvidia (NVDA) on earnings day include Taiwan Semiconductor Manufacturing (TSM), Micron (MU), and ASE Technology (ASX). Supplier Fabrinet (FN) also frequently moves in tandem with Nvidia (NVDA) on earnings day. Tesla (TSLA) was mentioned during Nvidia's (NVDA) Q1 earnings call as a significant Blackwell time-to-market customer. Thursday - August 29 Earnings watch - Notable companies due to report include Dell Technologies (DELL), Marvell Technology (MRVL), Autodesk (ADSK), Dollar General (DG), Best Buy (BBY), Gap (GAP), Ulta Beauty (ULTA), and Lululemon (LULU). Options trading implies a large share price swing for Domo (DOMO) and MongoDB (MDB) after their reports are released. All day - Shareholders with Marathon Oil Corporation (MRO) will vote on the planned merger with ConocoPhillips (COP). The merger is part of a broader consolidation trend in the oil and gas industry aimed at achieving greater efficiencies and economies of scale. 1:30 p.m. Sherwin-Williams Company (SHW) will hold its Financial Community Presentation in Boston, Massachusetts. Friday - August 30 All day - Additions and deletions to the MSCI equity indexes will be made at the close of the market. Flutter Entertainment (FLUT), Embraer (ERJ), Ibotta (IBTA), and Reddit (RDDT) are notable companies being added to various MSCI indexes. All day - The HSR review period by the Federal Trade Commission for Darden Restaurants' (DRI) acquisition of Chuy's Holdings (CHUY) is set to expire. 8:30 a.m. The core PCE price index report for July will be released. The Fed's favored inflation gauge was up 2.6% year-over-year in both May and June. 10:00 a.m. The Michigan Consumer Sentiment report will be released. Seeking Alpha Editor Josh Fineman contributed to this story. More on the markets This Is A Stock Market Correction In The Middle Of A Bull Market S&P 500: Not Adding Until Election (Rating Downgrade) Asset Class Scoreboard: July 2024 SA Sentiment Survey: Majority of investors believe Republicans will benefit the stock market SA Sentiment Survey: More than half of investors expect cuts in September and November/December