The Question for Nvidia: How Fat Will Its Earnings Be?

Tech is the engine that is driving the stock market’s growth nowadays, and the primary driver of the tech sector is Nvidia, which is up more than 20-fold over five years—much of that since the artificial intelligence craze hit in 2023. Ahead of expected lush earnings when the chipmaker reports this week, the stock rose 2.5% Monday.

When the company announces its April-ending first-quarter results on Wednesday, they are anticipated to confirm huge demand for its chips to power AI systems.

Consensus expectations on Wall Street are for Nvidia to report revenue of $24.53 billion, according to a FactSet consensus. But several analysts have suggested that to meet high market expectations it will likely need to declare around $26 billion for the first quarter and give guidance for a similar level in the current period.

In the January-ending quarter, the company had $22.1 billion in revenue. The first-quarter consensus for earnings per share is $5.17, a vast increase from 82 cents reported for 2023’s initial quarter.

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Nvidia holds the title as the biggest contributor to earnings growth for the information technology sector. If this company were excluded, the blended (year-over-year) earnings growth rate for the category would drop to 10.8% from 23.6%, per FactSet researchers.

Nvidia shares have surged 91% so far this year through Monday’s close. That compares with the 11% rises in the S&P 500 index and the Nasdaq Composite Index over the same period.

Other members of the so-called Magnificent Seven group of tech stocks displayed good first-quarter results, except for Tesla and Apple, which suffered revenue drops, although their share-price declines this year have evidently stopped.

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Tags: AI, chips, Earnings, FactSet, Magnificent Seven, Nasdaq, Nvidia, revenue, S&P 500, Stock Market, Tech

The California Public Employees’ Retirement System announced on Monday that it would vote against the appointment of ExxonMobil’s 12-member board of directors and its CEO at the company’s shareholder meeting on May 29.

Earlier this year, ExxonMobil filed a lawsuit against two shareholders, Arjun Capital and Follow This, who had previously filed a proxy resolution for ExxonMobil to seek additional actions on climate change. In a press release, CalPERS CEO Marcie Frost and CalPERS Board of Administration President Theresa Taylor accused the company of intimidation tactics against shareholders.

“For almost four decades, CalPERS has used its investments in major corporations to hold shareholder-elected directors and top officials accountable. We believe this is key to how we ensure long-term, sustainable investment returns for more than 2 million members. We do so, in part, by asking company leaders tough questions and, in some cases, demanding action through our support for various shareholder proposals. We cast thousands of votes every year,” a CalPERS press release stated.

A shareholder proposal from Mercy Investment Services Inc. and Wespath Benefits and Investments filed on April 18 called for shareholders to reject the appointment of the board and the ExxonMobil CEO. Last week, California Treasurer Fiona Ma urged the state’s largest pension funds, CalPERS and the California Teachers’ Retirement System, to cast their votes against ExxonMobil.

A CalSTRS spokesperson said that the fund is still determining how it will vote at Exxon’s upcoming shareholder meeting. “We are disappointed that Exxon has continued in its lawsuit against Arjuna Capital and Follow This to exclude a shareholder proposal on this year’s proxy. We believe the SEC’s no-action process is an established and superior process, and do not support the use of shareholder capital to attack shareholder rights. In determining our vote, we will be thoughtful and deliberate knowing there are several factors to consider including our stewardship priorities, engagement with the company, and long-term ramifications of the lawsuit,” The spokesperson said.

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According to CalPERS 13F filing for Q1 2024, the fund held 8.5 million shares of ExxonMobil, worth roughly $983 million. CalPERS, the largest pension fund in the U.S., has $495.3 billion in assets under management, as of the first quarter of 2024.