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Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Nvidia (NVDA) closed at $269.42, marking a +1.38% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.08%. Meanwhile, the Dow lost 0.56%, and the Nasdaq, a tech-heavy index, lost 4.81%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 3.09% over the past month, lagging the Computer and Technology sector's loss of 2.99% and the S&P 500's gain of 0.64% in that time.

Nvidia will be looking to display strength as it nears its next earnings release. In that report, analysts expect Nvidia to post earnings of $1.22 per share. This would mark year-over-year growth of 56.41%. Meanwhile, our latest consensus estimate is calling for revenue of $7.43 billion, up 48.53% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.33 per share and revenue of $26.7 billion. These totals would mark changes of +73.2% and +60.14%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Nvidia. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% higher. Nvidia currently has a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Nvidia is holding a Forward P/E ratio of 62.16. This valuation marks a premium compared to its industry's average Forward P/E of 18.29.

We can also see that NVDA currently has a PEG ratio of 3.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - General was holding an average PEG ratio of 2.84 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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