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20 Nov

Nvidia’s Q3 earnings: challenges ahead for chipmaker giant

November 20, 2023

By George Prior 

Nvidia’s third quarter earnings when they are revealed on Tuesday will be impressive and the guidance positive, but the company faces challenges ahead, yet almost every investor needs exposure to semiconductors.

This is the prediction from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, ahead of the chip maker’s report this week.

All eyes are on the tech giant after a strong second quarter performance that saw revenues soar to $13.5bn.

The deVere CEO says: “Nvidia’s second-quarter, epic, shock-and-awe-esque earnings report still looms large in the minds of investors around the world.  Now all eyes are on the semiconductor titan’s revenues on Tuesday.

“While we expect the revenue growth to still be hugely impressive and the company’s stellar rise will undoubtedly continue, its trajectory also faces challenges ahead.”

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He continues: “There is growing and intensifying competition in the semiconductor market and this will threaten Nvidia’s market share and, therefore, margins over the longer term.

“In addition, the 170% surge in the second quarter mainly came from data centre revenues and Nvidia is very exposed to China.

“With China tightening regulations and cracking down on various industries, including technology, the company may face headwinds in this critical market. Regulatory uncertainties and geopolitical tensions could impact Nvidia’s ability to sustain its mighty results, especially if there are disruptions to its business operations in China.”

Despite the potential challenges on the horizon, the overarching theme remains—semiconductors are a cornerstone of the contemporary tech-driven world.

“Almost every investor should recognise the strategic importance of semiconductor stocks in their portfolios,” notes Nigel Green.

“As the backbone of the digital era, semiconductors power a vast array of technologies, from consumer electronics to advanced computing systems.”

The semiconductor industry’s continued growth is propelled by the increasing demand for smart devices, the expansion of 5G networks, and the rapid development of artificial intelligence and machine learning.

Including semiconductor stocks in a diversified portfolio offers investors exposure to a sector with long-term growth potential. The sector’s resilience, adaptability, and its role in driving technological innovation make it an attractive choice for those seeking stability amid market uncertainties.

“Nvidia’s upcoming earnings report is a pivotal moment for investors to assess the company’s standing in the dynamic semiconductor landscape.

“Investors, recognizing the critical role of semiconductors now and in the future, are likely to find value.

“Your future self will thank you for maintaining or establishing positions in this key sector,” concludes the deVere CEO.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

 


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