Nvidia logo and sign on headquarters. Blurred foreground with green trees – Santa Clara, California, USA – 2020

The Nvidia stock price is hovering near its all-time high ahead of the company’s first-quarter earnings that will come out on Wednesday. NVDA has jumped by more than 22% this year and by more than 80% in the past 12 months. This brings its total market capitalization to more than $388 billion.

Nvidia earnings preview

Nvidia stock price has rallied, helped by the surging demand for its graphics card as more people turned to gaming during the pandemic. The stock also jumped because of the strength of the cryptocurrency industry. This is notable since the company’s graphics cards are the most popular among gamers. Recently, the stock surged after the company decided to split its share price to make it more affordable among retail investors.

Focus now shifts to the company’s first-quarter earnings that will come out on Wednesday after the market closes. In the fourth quarter, the company had a revenue of more than $5 billion and earnings per share of $3.10.

For the first quarter, analysts polled by Reuters expect that the company’s revenue increased to $5.41 billion in the first quarter while its EPS rose to $3.28. Still, going by its track record, there is a possibility that the company’s results will be better than expected. Furthermore, the firm has reported better-than-expected results in all quarters since the fourth quarter of 2019. Further, according to FactSet, more than 70% of all companies in the S&P 500 reported better results. 

Nvidia analysts
Nvidia has a long history of beating analysts’ estimates

Investors will be looking at three things. First, they will watch the strength of the video game industry as the world economy reopens. Second, they will listen to comments about the RTX 30 series, which is a popular card among crypto miners. In a recent statement, the company said that its mining revenue estimate tripled to $150 million.

Finally, investors will focus on guidance, data-center business, and the progress on its Arm acquisition. Analysts expect that the data center revenue jumped by 75% to $2.0 billion. So, is the Nvidia stock a buy ahead of earnings?

Nvidia stock price forecast

Nvidia stock price
Nvidia stock price chart

The daily chart shows that the Nvidia stock price has been in a strong bullish trend in the past few months. However, its momentum has waned slightly in the past few sessions. The stock is still being supported by the 100-day and 50-day exponential moving averages. It is also slightly below the all-time high of $650.

However, some danger signs have started to emerge. For example, the stock has formed a rising wedge pattern. In price action, this is a sign that the momentum is fading. Therefore, we can’t rule out a situation where the NVDA stock price underperforms in the near term. Like I wrote in my AMD stock price review, any drops will be considered viable buying opportunities.

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