Nvidia faces first earnings without Huang on Tuesday

Nvidia ↘ 2.01% will report fiscal third-quarter results after the market closes on Tuesday, Nov. 17. It will be the company's first quarterly report in 33 years without Jensen Huang as chief executive. The board said on Thursday, Nov. 12, that Huang had resigned as president, CEO and director, effective immediately. CFO Colette Kress is serving as interim CEO while she continues as finance chief. Options traders are pricing a move of about 9.1% in either direction after the report.benzinga.com+1

The report will test whether the chipmaker's results can steady investors after a week focused on leadership, national security and China.

A scandal and a sell-off

Huang left after reports of extramarital affairs, including one with a woman described as a suspected Chinese spy. US lawmakers say he has agreed to appear before Congress to discuss whether national security was compromised. The board is looking for a permanent CEO and will consider internal and external candidates. It also named Harvey C. Jones as its first-ever chair. "NVIDIA's strength has always come from its people," Kress said.sec.gov+2

The stock fell 12.7% this week to close Friday at $162.85. It was the sixth straight weekly loss, the longest losing streak since October 2012. Shares are 31.9% below their Oct. 6 record close, a drop of about $1.8 trillion in market value. Selling picked up on Friday after Bloomberg reported that a company founded by Alice Huang obtained banned Nvidia chips for a Shanghai data center.benzinga.com

What Wall Street expects

Analysts expect earnings of about $2.48 a share on revenue of roughly $109 billion. That is up from $1.30 a share a year earlier. Gross margin is expected near 74%, down from 75% last quarter, and investors will also watch the rollout of the Vera Rubin chips.newsobserver.com+1

Brokers downgraded the stock in quick succession. HSBC ↗ 0.61% cut it to Hold with a $170 target, and Truist ↗ 0.16% and Oppenheimer ↘ 0.48% also downgraded it. GF Securities analyst Jeff Pu moved to Hold but still expects Nvidia to beat estimates.uk.finance.yahoo.com+1

Ripple effects for the AI trade

Nvidia's weight in the major indexes means its results could move the S&P 500 ↘ 0.36% and the Nasdaq 100. Both rebounded last week from oversold levels. FOREX.com analyst James Stanley questioned whether revenue tied to Huang-era deals with customers that Nvidia also backs can keep growing now that "the loss of confidence and trust" is weighing on the stock.forex.com

HSBC's Frank Lee said the "leadership change amidst lack of clarity on succession has driven aggressive de-rating." Main Street Research's James Demmert took the other side: "We believe the coast is clear to start buying the stock".benzinga.com