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Nvidia (NVDA) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·3-min read
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Nvidia (NVDA) closed at $636.50 in the latest trading session, marking a -1.39% move from the prior day. This change lagged the S&P 500's daily gain of 0.36%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 14.51% in the past month. In that same time, the Computer and Technology sector gained 9.06%, while the S&P 500 gained 5.21%.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. The company is expected to report EPS of $3.25, up 80.56% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.39 billion, up 75.11% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $13.53 per share and revenue of $22.46 billion, which would represent changes of +35.3% and +34.68%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for NVDA. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.09% higher within the past month. NVDA is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, NVDA is holding a Forward P/E ratio of 45.26. For comparison, its industry has an average Forward P/E of 25.28, which means NVDA is trading at a premium to the group.

Meanwhile, NVDA's PEG ratio is currently 3.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NVDA's industry had an average PEG ratio of 3.01 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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