Stocks are ending a turbulent week lower after another hot inflation report

You may want to take time off from work on February 21, 2024.

Why?

Humanity's most important company, Nvidia (NVDA), will report earnings after the close! One word from the leader of the King of Chips – Mr Jensen Huang – can make or break the broader market for weeks.

I know that sounds absolutely ridiculous, but it underscores how crazy it has become to study and report on this leading AI game. Here's a company that could very well post triple-digit percentage earnings growth in its most recent quarter, and that could be seen as a disappointment.

In fact, Nvidia could report triple-digit percentage earnings growth and deliver two more quarters of it, but that still may not be enough for investors who have seen the stock rise 55% since the start of 2024.

And I think that concern is highlighted well in a new Bank of America note from veteran chips analyst Vivek Arya that I just spotted in my Friday inbox.

Here's what caught my attention about Arya:

“[We] After the stock's recent parabolic rise, it won't be surprising to see a significant but brief decline – Bloomberg options suggest an implied move of about 11% after earnings. Expectations have been rising steadily, with some bullish buyer estimates for Nvidia F4Q/1Q report/guided revenue at $21.7 billion/$23 billion, or 9%/7% above consensus, leaving less room for positive surprises.”

However, Arya is in the profit zone with a buy rating and a price target of $800 for Nvidia.

He added:

“However, in our view, any potential mismatch with bullish expectations is likely due to supply (storage, packaging) rather than demand or competition. More importantly, we expect stock volatility will likely be short-lived, especially as investors await Nvidia's flagship GPU Tech Conference (GTC), scheduled for March 18-21, and key pipelines , partners and AI TAM will present [total addressable market] Update. For reference, Nvidia stock was on average 6% higher T+1 days after the last six annual GTC events (compared to SPX it was up 1%).

Probably just another day in Nvidia hype land.