The upcoming quarterly results of $NVIDIA (NVDA.US)$ are not just a matter of interest for the company, but also for six other AI-related stocks that tend to rise when Nvidia outperforms.
What Happened: An analysis has identified six AI-related stocks that typically experience a positive reaction when Nvidia beats its estimates, reported CNBC.
These stocks have shown a consistent upward trend following Nvidia's quarterly results. The six stocks are $Super Micro Computer (SMCI.US)$, $Advanced Micro Devices (AMD.US)$, $Marvell Technology (MRVL.US)$, $Vertiv Holdings (VRT.US)$, $Synopsys (SNPS.US)$, and $Advantest (ADR) (ATEYY.US)$.
These stocks, all of which are listed in the U.S., have shown increases ranging from 6% to 33% following Nvidia's strong earnings in the past. The results of Nvidia's first quarter of 2024, set to be released on Wednesday after the market closes, are expected to be positive, with Wall Street analysts forecasting an EPS of $5.52.
Super Micro Computer, a company specializing in tech infrastructure, has been a significant beneficiary of the AI investment trend, with its stock soaring over 900% in the past year.
AMD, Nvidia's leading competitor, has also seen a rise in its shares after Nvidia's earnings, reflecting the continued investor interest in GPU companies.
Advantest Corp, the world's largest microchip tester, has also experienced significant growth due to the AI-fueled rally.
Why It Matters: The AI industry has been a major driver of growth for many companies, with Nvidia being a key player. Despite some skepticism about Nvidia's future growth potential, as expressed by Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, the company's earnings have continued to impress.
The first quarter earnings cycle has seen a notable acceleration in growth, particularly in the technology sector. However, there have also been reports of Amazon halting orders of Nvidia's "superchip."
Despite this, the AI industry continues to attract significant investment, as highlighted by Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, who emphasized the transformative potential of AI across various industries.