(News Bulletin 247) – The graphics processor specialist was the first victim of the market crash at the beginning of August, before fully benefiting from the return of risk appetite. The company will publish its quarterly results next week.

Nvidia’s stock market summer has, for the moment, looked like a “V” curve. The graphics processor specialist and Wall Street darling for almost two years, suffered in late July and early August. To the point of losing 27% compared to its closing high of last June ($135.58), with the stock falling below $99 on August 7.

The situation has reversed fairly quickly, however, and the stock has regained much of its losses. Trading around $125.3 in pre-market trading on Friday, Nvidia shares have gained 27% since August 7.

Nvidia is, in a way, the perfect illustration of the behavior of the American market in recent weeks.

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Exaggerated fears

In late July and early August, disappointing macroeconomic statistics, including the July US employment report, caused panic in the stock markets. This further penalized the major tech stocks in New York, growth stocks. The Nasdaq lost 8% between August 1 and 8.

The move has particularly affected Nvidia, whose financial results and stock have been catapulted since late 2022 by the surge in demand for its graphics processors, essential for developing generative artificial intelligence (AI).

Nvidia has seen its share price multiplied by twelve since the end of 2022, which regularly fuels fears of speculative bubbles on the latter. These doubts were able to resurface at the beginning of August when the market underwent its violent correction.

“The fear of an AI bubble – so to speak, Nvidia – is one of the factors, along with the fear of a US recession and the liquidation of short positions on the yen, which led to the stock market correction at the beginning of August,” recalled Christopher Dembik, investment advisor at Pictet AM, in a recent note.

Fears that, in the opinion of most analysts, were (and still are) unjustified. “If we only look at Nvidia’s figures and the prospects of its customers, it is difficult to see how AI would be a bubble,” underlines Christopher Dembik.

A publication coming next week

“The AI ​​market is facing exponential demand with increasingly resource-intensive models” and “Nvidia’s customers have a lot of cash and are willing to invest massively to avoid being overtaken by the competition,” he argues.

Furthermore, 93% of the approximately 60 analysts covering the stock and listed by investing.com recommend buying it.

So much so that Nvidia has benefited fully from the return of risk appetite on the market over the last two weeks. Following several reassuring US economic indicators, the Nasdaq has risen for eight consecutive sessions, gaining 10%.

Nvidia is also set to release highly anticipated results next Wednesday for its second quarter. According to Wedbush, quoted by Cerclefinance, analysts are expecting revenues of $28.6 billion and earnings per share of 67 cents.

A publication that does not exceed expectations “could prove disappointing, which would have broader implications for the market as a whole,” warns Barclays bank. Since the first quarter of 2023, the company’s orders and results have each time atomized the forecasts, it recalls.