NVIDIA Corp. (NVDA) shares are getting a little love in Tuesday's premarket, up more than 1% as the broader market catches a bid. Nasdaq futures are up 0.97%, and S&P 500 futures are up 0.49%. It's the kind of quiet optimism that often precedes a big earnings event, and NVIDIA's got a big one coming tomorrow.
Investors are clearly positioning ahead of the report. That's not surprising. When a stock like NVIDIA is about to drop its quarterly numbers, trading can get choppy as people adjust their exposure. And with shares hovering near several widely watched moving averages, even a modest amount of buying could push the stock in a meaningful way.
But the headline numbers are only part of the story. The real focus for Wall Street will be on NVIDIA's Rubin product cycle, gross margins, and the company's financial backing for major AI projects. Let's dig into what the experts are saying.
Rasgon Sees Rubin Driving Data Center Growth
Bernstein's Stacy Rasgon was on CNBC over the weekend, and he's expecting a strong quarter from NVIDIA. But he's not just looking at the numbers. He's going to be listening closely to what management says about the Rubin ramp.
Here's the thing: NVIDIA's three-year outlook already points to roughly $500 billion in data center revenue next year. That's a staggering number. But Rasgon thinks the Rubin build plans suggest revenue could actually exceed that level. So the big question is whether management will raise its expectations. If they do, that could be a major catalyst for the stock.
Margins And AI Financing Draw Attention
Rasgon is also keeping an eye on gross margins. The concern is whether NVIDIA can hold margins in the mid-70% range as memory and wafer prices climb. Management has previously indicated that margins could stay near current levels, but it's something to watch.
Another thing on his radar: NVIDIA's financial support for major data center projects. Rasgon sees the company's balance sheet as a strategic weapon. Using excess cash to help customers fund their AI ambitions could expand the entire ecosystem, which in turn would strengthen long-term demand for NVIDIA's products. It's a smart play, if you think about it.
Rubin Could Extend NVIDIA's Stock Momentum
Rasgon did offer a word of caution, though. Strong earnings don't always translate into an immediate stock gain. We've seen other semiconductor companies report solid results recently and still get a lukewarm reception from the market. So there's no guarantee.
That said, he believes NVIDIA remains essential to the global AI infrastructure buildout. The stock has lagged some of its semiconductor peers for much of the past year, but it's recently started to outperform the group. And Rasgon sees the Rubin cycle as a potential catalyst for further gains. Historically, new product cycles have been good for NVIDIA's stock.
That's why the stock's position near those key moving averages is so important. A strong earnings report, combined with an upbeat Rubin update, could give buyers the confidence to push NVIDIA through nearby resistance.
Technical Analysis
Let's look at the charts. NVIDIA is in a long-term uptrend, trading about 8% above its 200-day simple moving average, which sits around $195. The 50-day average is also above the 200-day, which is a bullish signal.
Shares are holding above their 50-day and 100-day averages, which is good. But here's the catch: the stock is about 1% below its 20-day SMA of $213.78. That suggests the recent move is more of a pullback within a broader uptrend than a confirmed breakout.
Short-term momentum has weakened, too. The moving average convergence divergence (MACD) indicator is below its signal line, and the histogram is negative. That tells us the recent rally is losing steam.
Resistance is sitting near $214, which is close to the stock's short-term moving-average zone. If NVIDIA can sustain a move above that level, it could open a path toward the 52-week high of $236.54. On the downside, support is near $190, where buyers have stepped in before. A break below that could signal a deeper pullback.
Earnings And Analyst Outlook
NVIDIA is scheduled to report earnings on Wednesday. Analysts are expecting earnings of $2.09 per share, up from $1.04 a year earlier. Revenue is projected to hit $92.03 billion, compared with $46.74 billion last year. That's nearly double, which is just mind-boggling.
The stock is trading at 31.9 times earnings, which is a premium valuation, but investors are paying for growth. NVIDIA carries a Buy consensus rating, and the average price target is $328.79.
Raymond James raised its price target to $352 from a previous level on Tuesday and maintained a Strong Buy rating. Rosenblatt maintained a Buy rating and a $325 price target on Monday. KeyBanc also maintained an Overweight rating and a $330 price target on Monday. So the bulls are out in force.
MarketDash Edge Rankings
Looking at our Edge rankings, NVIDIA has a Momentum score of 49.19, which puts it near the middle of the market. Its Quality score of 97.72 and Growth score of 99.18 reflect strong business performance and growth expectations. But its Value score of 6.02 shows that the stock looks expensive based on traditional valuation measures.
Overall, the scorecard paints a picture of a high-quality growth company with a premium valuation. The stock's next sustained move could depend on whether buyers can reclaim resistance before earnings.
Top ETF Exposure
If you're looking at ETFs, NVIDIA is a big player in several. The Franklin Focused Dynamic Growth ETF (FFOG) has a 9.73% weighting in NVIDIA. The First Trust Innovation Leaders ETF (ILDR) has a 9.79% weighting, and the Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ) has a 9.94% weighting.
Because NVIDIA has such a large weighting in these funds, significant ETF inflows or outflows could trigger buying or selling of the stock. So keep an eye on those flows.
Price Action
NVIDIA shares rose 1.30% to $211.20 in Tuesday's premarket trading, according to market data.
