Equities report: All eyes on Nvidia

Major US stock market indexes moved lower last week, yet appear to be on the rise since Monday. Today we are to have a closer look at NVIDIA’s earnings report which is due out later today and the recent updates in the DOJ lawsuit against Google which could have severe implications in the overall tech industry. For a rounder view we are to conclude the report with a technical analysis of S&P 500’s daily chart. 

The Golden child of Wall Street, NVIDIA is set to release its earnings today

NVIDIA is set to release its earnings today after the bell closes, with analysts around the world eagerly anticipating their revenue and EPS figures. In particular, the company is expected to increase their EPS figure to $0.75 from $0.68, in addition to the company’s revenue increasing to $33.09B from $30B in the last quarter, which could further fuel market enthusiasm for the tech sector and its future prospects. Thus, should the company manage to beat the street’s expectations once again, it may aid the company’s stock price and in turn could also benefit the wider US Equities markets given NVIDIA’s status as an industry heavyweight and a benchmark for the tech sector. However, should the company fail to meet the expectations of analysts and reports lower-than-expected earnings per share, or revenue it could have the opposite effect and thus weigh on NVIDIA’s stock price. Moreover, in focus for investors is NVIDIA’s Blackwell GPU which has allegedly faced overheating issues and could be concerning for the company’s attempt to further solidify itself as the leading AI chipmaker in the industry. Hence, we would closely monitor any references to the new Blackwell GPUs during the company’s earnings call and forward guidance, which could in turn impact the company’s stock price. In our view, we would not be surprised to see NVIDIA beat or achieve the EPS and revenue expectations by analysts, yet that may be overshadowed should the company admit that its Blackwell GPUs are facing overheating issues.

DOJ to request that Google sells its chrome browser

According to Bloomberg, the DOJ will be asking a Judge to request the sale of Google’s (#GOOG) Chrome Web Browser after federal Judge Mehta ruled in August that Google has illegally monopolized the search market. Moreover, Bloomberg claims that its sources have also stated that the DOJ also plans to recommend that the aforementioned Judge, imposes data licensing requirements which could further burden the company, which has used its Chrome browser to garner revenue from search advertising and other related segments, which makes up a large chunk of Google’s revenue streams. According to the court’s calendar, the next meeting between the DOJ and Google is set to occur on the 26th of November, after which new developments could emerge in regards to the aforementioned case. Overall, the possibility that Google may be forced to sell off its Chrome browser, it could significantly weigh on the company’s stock price. On the flip side, should the DOJ and Google reach an agreement that may prevent the overall sale of its Chrome Web Browser, it could aid the company’s stock price.

Technical analysis

US500 daily chart

• Support: 5885 (S1), 5675 (S2), 5400 (S3).

• Resistance: 6030 (R1), 6250 (R2), 6525 (R3).

S&P 500 appears top be moving in an overall upwards fashion after moving lower and confirming the support turned to resistance line at the 5885 (S1) level. We opt for a bullish outlook and supporting our case is the index’s failure to break below our 5885 (S1) support level, in addition to the RSI indicator below our chart currently registering a figure near the figure of 60, implying that some bullish tendencies remain. Yet at the same time the figure below 60, could also imply that the bullish momentum that has been guiding the index, may be fading away. Nevertheless, for our bullish outlook to continue, we would require a clear break above the 6030 (R1) resistance level, with the next possible target for the bulls being the 6250 (R2) resistance line. On the flip side for a sideways bias we would require the index to remain confined between the 5885 (S1) support level and the 6030 (R1) resistance line. Lastly, for a bearish outlook we would require a clear break below the 5885 (S1) support level with the next possible target for the bears being the 5675(S2) support line.