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Stock market: the earnings of Cisco and NVIDIA
2020-03-13 • Updated
The earnings season in the United States is still on. This means stocks of the largest American companies will likely make big moves. You can trade these stocks with FBS (learn more) and make money!
Wednesday, August 14
Cisco
EPS forecast: $0.81
Revenue forecast: $13.39B
Cisco Systems is an American multinational technology conglomerate which develops, manufactures and sells networking hardware, telecommunications equipment, and other high-technology services and products. In simple terms, Cisco provides connectivity to end-users, workstations, IP phones, access points, and servers. All in all, its business looks good: the firm isn’t very exposed to China, occupies a strong market position and makes efforts to improve it further by conquering security market and partnering up with the world’s top technological firms.
According to analysts’ expectations, the company’s earnings have increased by 17%, while revenue has risen by 4% y/y. The only question is whether the company lives up to the good forecasts. If the actual figures top the estimates, the stock will turn up. On the contrary, if Cisco’s financial results disappoint, the price will test support.
After meeting resistance in the area of 58.00, Cisco’s stock turned down and survived a substantial decline before finding support in the 51.00 area (May low, 200-day MA). Still, the price remains within the long-term uptrend, so the price action of the recent months was only a consolidation. Support is at 50.30 (50-week MA) and 49.00. Resistance is at 54.00.
Thursday, August 15
NVIDIA
EPS forecast: $1.14
Revenue forecast: $2.55B
According to the forecasts, Nvidia’s earnings have declined by more than 40% y/y, while revenue has contracted by 18.5%. Revenue from gaming, the company’s largest business, is expected to decline nearly 29% to $1.29 billion as more and more gamers switch from PCs to consoles and Nvidia’s products are not incorporated in the latter.
Moreover, in the competitive graphics card market, Nvidia is facing tough competition from AMD. The firm has launched a new version of its flagship chip as an alternative to AMD’s new products. However, Nvidia has to sell its chips at low prices and this can’t be good for the company. To sum up, it seems that Nvidia has plenty of challenges ahead and its future looks uncertain.
Technically the stock has been consolidating after a sharp decline at the end of 2018. Resistance line connecting April and July highs provides resistance around 175.00. Support line connecting December and June lows is in the 136.00 area. The decline below 148.00 should open the way to the 200-week MA at 140.95.
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