The consensus earnings estimate of $5.39 for the current fiscal year indicates a year-over-year change of +21.4%. The Zacks Consensus Estimate has changed -2.2% over the last 30 days. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.įor the current quarter, Nvidia is expected to post earnings of $1.26 per share, indicating a change of +21.2% from the year-ago quarter. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. And if earnings estimates go up for a company, the fair value for its stock goes up.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends.
This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. Now whatīut here's what's giving Nvidia investors a case of nerves today: All of this spending to increase capacity also means that the end of the chip shortage is approaching more rapidly than it otherwise might.Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is great news for ASML and probably great news for chipmakers like Intel, TSMC, and Nvidia, too, because it only makes sense for them to be spending so much money buying machines from ASML if they see such strong demand for their chips. The company predicts revenue will surge as much as 69% to $28 billion by 2025, with gross margins rising past 54%.
CNBC reported today that Dutch machinist ASML Holding ( ASML -2.00%), which manufacturers the machines that make the chips for so many of our high-tech gadgets, is predicting a boom in its business over the next four years, and even beyond.Īs ASML customers such as Intel ( INTC -3.45%), Taiwan Semiconductor Manufacturing ( TSM 0.18%), and Samsung race to expand their capacity to churn out chips, they're spending freely at ASML.
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