All eyes are on Nvidia (NVDA), which is scheduled to report its second-quarter earnings on Wednesday, August 28. Thomas Hayes, chairman and managing member of Great Hill Capital, appears on Wealth! to analyze the market outlook for the rest of the year and how the semiconductor giant’s earnings could impact the performance of tech-heavy indexes (^IXIC, ^GSPC).
Hayes expects a shift from large to small caps as the Federal Reserve begins to ease interest rates (^RUT). He points out that small cap earnings are expected to grow 7% this year and 37% next year, while Magnificent Seven earnings are expected to slow from 30% this year to 18% next year. He adds that if Nvidia misses earnings expectations, “a lot of the stocks below the surface will start to fill the hole.”
Nvidia has led growth in the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) this year, and Hayes expects the semiconductor giant’s second-quarter earnings to be “decent,” as Nvidia’s spending could hurt margins and revenue growth.
“I think there will come a time when investors say, ‘Where is the return on investment?'” Hayes explains.
But he believes “NVIDIA is priced perfectly” at the moment, noting that the company is valued at $3.2 trillion, which is 11% of the total U.S. GDP (gross domestic product).
For more expert insights and the latest market trends, click here to watch this full episode of Wealth.
This post was written by Melanie Leal
Check out Yahoo Finance’s latest coverage of Nvidia ahead of its earnings release this week.
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