Wall Street predicts Nvidia's fourth-quarter profit to be $11.38 billion, a staggering increase of over 400% from the previous year. The company's revenue is also expected to triple to $20.37 billion. However, Nvidia's high trading multiple suggests that its earnings potential may already be priced into the stock, potentially limiting further growth.
Key takeaways:
- Nvidia has overtaken Google-parent Alphabet’s stock market capitalization to become the third biggest U.S. company.
- The company's stock has increased by 231% in the past 12 months due to strong demand for its chips used in artificial intelligence computing.
- Nvidia is expected to post $11.38 billion in fourth-quarter profit, a more than 400% increase from a year ago.
- The company now trades 33.19 times its forward earnings estimates, which is above the industry median multiple of 27.35, indicating that the stock may have priced in its earnings potential.