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Get ready for the big show. The most talked about stock in the financial world is set to report earnings after the closing bell on Wednesday, with big bets taking place before the closely-watched results, outlook and accompanying commentary. Nvidia's (NVDA) impressive returns have not only been limited to the stock, but have been a big force behind the AI frenzy that has helped power the broader market and Magnificent 7 in 2023 and beyond.

By the numbers: Nvidia's consensus EPS estimate for Q4 comes in at $4.63 (+426% Y/Y), with a revenue forecast of $20.5B (+236% Y/Y), up from $6.1B in the prior year. That's a staggering difference, with the AI darling now making nearly as much revenue per quarter as it used to do on an annual basis. Nvidia's stock has reflected these major gains, quadrupling over the past year and up 40% YTD to about $700 per share. It's also led Nvidia to recently become the third largest U.S. company, as well as topping Tesla (TSLA) to become the most popularly traded stock on Wall Street.

If there is any guide to how shares will trade after earnings, keep an eye on forward guidance. If more exponential growth is in store for Nvidia, the stock may continue to rocket, but if there are signs to the contrary, the reaction might be more muted or even go in the other direction. Going into earnings, Nvidia (NVDA) suffered the largest daily loss of market cap in its history, but with a market cap of about $1.7T, even a 4% move can allow those numbers to make headlines. Another item to watch on the earnings conference call will be comments made about trade restrictions, with the U.S. putting sanctions in place on GPUs like the H100, or rising competition from other companies. Check out some commentary from SA analysts below:

Buy: "Nvidia's ability to deliver on promises and exceed expectations, coupled with an unprecedented competitive advantage, means this stock can likely continue rallying despite high valuation risk," SA analyst Christopher Robb writes in Poking Holes In The Nvidia Bear Case: Q4 Pre-Earnings Report. "The mechanism for the Internet crash around the turn of the millennium was valuations getting ahead of earnings. However, the young AI revolution essentially saw the opposite problem for its most fortuitous beneficiaries like Nvidia, so far. Earnings have gotten ahead of valuations in this stock market darling's case." (132 comments)

Sell: "Nvidia's lead times for GPU orders have decreased from 8-11 months to just 3-4 months, indicating a potential future sequential growth peak," Investing Group Leader Paulo Santos notes in Nvidia: UBS Note Should Raise Alarms. "Having ascended to the 3rd largest market cap in the US markets based on discounting ceaseless growth into the future, caution is certainly warranted as there's clear risk this ceaseless (sequential) growth will cease in the near future." (268 comments)

Hold: "Nvidia can be hedged with protective puts quite cheaply now in relation to its stock price," SA analyst A.J. Button explains in Nvidia: Buy Protection Before Earnings. "Although Nvidia has fantastic growth and a wide moat, that doesn't mean the stock is worth, say, $10 trillion. Any series of future cash flows is finite, which means asset prices are finite as well. The question, of course, is where the upper limit of fair value actually resides." (83 comments)

Walmart recap

Walmart (WMT) climbed 3.2% to a record high on Tuesday after topping estimates with Q4 results amid e-commerce sales that jumped an impressive 23%. CEO Doug McMillon pointed to slowing deflation trends during the quarter, with inflation stickier than expected, meaning more shoppers led to increased revenues, not prices. Meanwhile, Walmart declared an annual dividend of $0.83/share on a post-stock split basis, or $2.49/share on a pre-split basis, a 9% increase from last year. The retail giant also confirmed that it would acquire TV maker Vizio (VZIO) for $11.50/share in cash, or around $2.3B. (38 comments)

Dow shakeup

Effective Feb. 26, Amazon (AMZN) will be added to the Dow Jones Industrial Average (DJI), replacing Walgreens Boots Alliance (WBA). The change reflects the evolving nature of the economy and was prompted by Walmart’s (WMT) 3-for-1 stock split, which will reduce its weight in the index. Elsewhere, Uber (UBER) will be added to the Dow Jones Transportation Average (DJT), replacing JetBlue (JBLU), to increase exposure within the index to the ride-sharing industry. The shakeup sent Amazon and Uber up around 1% each in AH on Tuesday, while Walgreens fell 3% and JetBlue slipped marginally. (52 comments)

Robot deliveries

Embarking on a new international drive, Uber (UBER) is inking some new partnerships to begin delivering food using autonomous robots in parts of Tokyo. Cartken's Model C robots, which use AI and computer vision technologies to navigate sidewalks, will be used in the venture, with Mitsubishi Electric supervising the operations. Uber Eats and Cartken first partnered to launch autonomous delivery services in parts of Miami, Florida in 2022, which then expanded to Fairfax, Virginia. Uber Eats also has similar partnerships in the U.S. with robotics firms MotionalNuro and Serve Robotics. (1 comment)

Today's Markets

In Asia, Japan -0.3%. Hong Kong +1.6%. China +1%. India -0.6%.
In Europe, at midday, London -0.8%. Paris +0.2%. Frankfurt +0.4%.
Futures at 7:00, Dow -0.2%. S&P -0.2%. Nasdaq -0.5%. Crude -0.6% to $76.55. Gold flat at $2,039.10. Bitcoin -2.5% to $51,007.
Ten-year Treasury Yield -1 bp to 4.26%.

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:00 Fed's Bostic Speech
10:00 Atlanta Fed's Business Inflation Expectations
11:30 Results of $28B, 2-Year FRN Auction
1:00 PM Fed's Bowman Speech
1:00 PM Results of $16B, 20-Year Bond Auction
2:00 PM FOMC Minutes

Companies reporting earnings today »

What else is happening...

U.S. House sets up task force to explore legislation to manage AI.

Palo Alto Networks (PANW) plunges after cutting billings and guidance.

Bezos offloads more Amazon (AMZN) shares to cap off stock sale plan.

Occidental (OXY) explores potential sale of Western Midstream (WES).

Home Depot (HD) falls after U.S. comparable sales growth disappoints.

Ford (F) cuts prices on Mustang Mach-E in a bid to boost sales.

SolarEdge (SEDG) sales guidance comes in far below estimates.

Report: PE interest in Sanofi's (SNY) $20B consumer health unit.

Realty Income (O) posts mixed earnings; guidance comes in slightly soft.

Chinese banks approve $17B of loans for 'white list' real estate projects.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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