Nvidia Lost a Record $78 Billion in Market Cap Today. Earnings Are Up Next.

Nvidia shares fell 4.4% to $689.20 on Tuesday. The company lost $78 billion in market capitalization, the largest one-day market cap decline in its history, according to Dow Jones Market Data.

The stock garnered another price upgrade this week as
HSBC
analyst Frank Lee raised his target price to $835 from $800 and maintained a Buy rating, although he played down expectations for an earnings bump, expecting Nvidia’s sales to be in line with consensus expectations. 

Nvidia is expected to report quarterly earnings of $4.59 a share and revenue of $20.4 billion, according to a FactSet poll of analysts’ estimates.

“We believe overall market expectations have risen significantly as consensus earnings are now approaching our forecasts. Hence, we see limited room for further earnings upside in 2024 relative to the sales and earnings surprise that we saw in 2023,” wrote Lee in a research note on Monday. 

Lee said he was confident Nvidia would benefit in the longer term from the company’s expansion into markets such as central processing units. His target price is based on a price-to-earnings multiple of 35 times Nvidia’s forecast earnings in fiscal year 2025.

Other chip maker stocks were mixed.
Advanced Micro Devices
was down 4.7% and
Intel
was up 2.3%. The Biden administration held talks to award more than $10 billion in subsidies to Intel, Bloomberg reported on Friday citing people familiar with the matter.

One issue that Nvidia’s management is likely to face questions about during its earnings call is competition from other companies such as AMD, especially as the market looks for chips that can perform inference—producing results or answers from AI systems—in addition to training tasks.

“As Inference workloads continue to come into focus, we would
expect more concerns on pricing given AMD’s positioning…We would note that early feedback from supply chain participants on Nvidia’s GH200 CPUGPU hybrid system has been positive with respect to adoption as an Inference platform,” wrote Stifel analyst Ruben Roy in a research note on Tuesday.

Roy kept a Buy rating on Nvidia stock with an $865 target price, based on a price-to-earnings multiple of 35 times the company’s forecast earnings for fiscal 2026.

Nvidia on Tuesday said it would hold its
GTC
2024 conference from March 18-21 and speakers would include executives from
Microsoft,

Alphabet’s
Google, and
Meta Platforms.

Nvidia shares have risen 40% this year through Tuesday’s close. That compares with a 4.3% rise for the
S&P 500
index and a 4.1% gain in the
Nasdaq Composite
Index.

Write to Adam Clark at [email protected]