Nvidia performing well in AI economy, retail sector earnings lackluster

From Nasdaq: 2024-08-23 18:12:00

The Q2 earnings season is wrapping up, with Nvidia among the last to report. Nvidia has been a leader in the AI economy, consistently beating estimates. While shares have soared this year, the stock is trading at 40.2X forward 12-month EPS estimates. The company’s competitive advantage in the AI revolution will determine future success.

Retail sector earnings have been lackluster, with 30 S&P 500 companies reporting an increase in earnings of +17.3% from last year. Amazon’s results significantly impact the sector’s overall performance. The convergence of digital and brick-and-mortar retailers is changing the landscape.

Over 140 companies, including Salesforce and Lululemon, are set to report Q2 results this week. 79.9% of S&P 500 members have beaten EPS estimates, but only 60.3% have exceeded revenue expectations. The Q2 revenue beats percentage is at an all-time low, reflecting a challenging environment for companies.

Q2 earnings for the S&P 500 are expected to increase by +9.6% from last year, with revenues up +5.4%. This marks the highest earnings growth pace in the last eight quarters. The aggregate earnings total for Q2 is on track to be a new all-time quarterly record, showing overall positive trends for the market.



Read more at Nasdaq:: A Closer Look at Retail and Nvidia Earnings