Get ready for a big event, as Nvidia (NASDAQ:NVDA) is scheduled to disclose its second-quarter 2022 earnings on Aug. 24. The company recently offered unambitious guidance for the three months ending in July. Plus, at least one big-bank analyst issued a warning that Nvidia will likely reduce its forward guidance. Since the expectations are generally quite low now, it’s a great time to buy NVDA stock and consider holding it until it hits $300.
Among graphics card and microprocessor makers, Nvidia is one of the most respected companies. Therefore, many traders will watch closely as it releases its quarterly earnings and forward guidance.
The data might actually have broader implications beyond the company itself. Nvidia’s results can help tech market investors know whether chipmakers have finally turned a corner. And who knows — a dour outlook in the past just might lead to a stunning relief rally in the near future.
What’s Happening with NVDA Stock?
Nvidia’s quarterly release will be high-stakes because NVDA stock holders could really use a boost now. Sure, Nvidia pays a dividend, but it’s only 0.09% per year. Besides, the share price sank from $300 at the beginning of 2022 to less than $200 in recent weeks.
The stockholders really need to see some share-price movement, and I picked $300 as a realistic target. Nvidia shares already traded at that price, and if the general sense of pessimism is wrong, a revisit of $300 isn’t out of the question at all.
Heck, even the company itself is somewhat pessimistic. On Aug. 8, Financial Times reported that Nvidia “cut its financial guidance for the three months to July, warning that weaker gaming revenue would hit earnings.” This isn’t shown on Nvidia’s news page, but that’s understandable.
Nvidia and a BofA Analyst Aren’t Optimistic
So, here’s the rundown. Previously, Nvidia had indicated that revenue for Q2 would be $8.1 billion. In the updated quarterly pre-announcement, however, the company stated its second-quarter revenue is expected to reach only $6.7 billion.
Furthermore, analysts on Wall Street aren’t expecting much from Nvidia. Specifically, they’re bracing for Nvidia to post earnings of 59 cents per share, indicating a year-over-year (YOY) decline of 43.3%.
On top of all that, BofA Global Research analyst Vivek Arya is preparing for Nvidia to cut its forward guidance in its upcoming quarterly press release. There could be a silver lining, though. According to Arya:
“While another guide-down will be unwelcome … this ‘second cut’ could clear the decks ahead of the upcoming new 5nm [nanometer] gaming (Lovelace) and data center (Hopper, Grace) pipeline.”
What You Can Do Now
Arya envisions positive long-term results, and you can as well. From the depths of widespread pessimism, Nvidia can emerge victorious with one or more positive surprises.
With that, NVDA stock’s path back to $300 would become clear and inevitable. So, feel free to take advantage of the low expectations and buy a few Nvidia shares before Aug. 24.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.