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Nvidia reports with Kress at helm. Bull v. Bear. (0:30) Can Anthropic’s IPO save the AI trade? (1:37) Potential Grand Theft Auto 6 trades. (2:25)
The following is an abridged transcript:
Get ready for an epic week on Wall Street.
We’ll get what may be the most important earnings report for market sentiment this year, possibly the biggest stock listing ever and what’s being called the most important media release in history.
Nvidia (NVDA) reports earnings after the bell Tuesday, with Jensen Huang gone and Colette Kress at the helm for now.
Wall Street expects EPS of $2.47 on revenue of $108.73B.
As the company’s former CFO, Kress can be expected to deftly handle any questions on numbers, including tricky ones about Singapore revenue, which faces increased scrutiny due to concerns about GPUs making their way from that market to China.
But how will Kress handle questions about Huang’s departure and the risks associated with losing the face of the company?
SA analyst Damir Tokic, who has a Sell rating on the stock, says “the risk is that AI adoption does not progress as expected” and “Nvidia could end up like Cisco in the dot-com bubble burst aftermath.”
On the bull side, though, Cash Flow Venue says Nvidia is undervalued compared with peers and the stock has “room to double” as it keeps growing its bottom line.
Sooner or later, “Mr. Market will reward it with a solid multiple expansion,” they said.
Also on the earnings calendar:
Baidu (BIDU) and XPeng (XPEV) report Monday.
Home Depot (HD) and Disney (DIS) join Nvidia on Tuesday.
Palo Alto Networks (PANW) and Target (TGT) weigh in on Wednesday.
Walmart (WMT) and Alibaba (BABA) report Thursday.
Sticking with the AI trade, Anthropic (ANT) is expected to price its IPO Wednesday night ahead of its trading debut Thursday.
At the top of the expected price range of $70 to $78, the offering would raise up to $64.4B (alongside a $26B concurrent private placement) and value the company at roughly $1T based on outstanding shares, or up to $1.4T fully diluted.
SA analyst Amrita Roy says Anthropic’s conservative pricing “leaves room for a post-IPO pop, which could help lift the entire AI trade along with it.”
Analyst Michael McGrath, who rates ANT a Strong Buy, says it’s a much better investment than other aspirational plays such as SpaceX (SPCX), with a valuation of almost $2T, and Tesla (TSLA), with a valuation of $1.5T.
“Even with current revenue, Anthropic stands out,” he said.
After a 13-year wait, Grand Theft Auto 6 also debuts on Thursday.
At launch, the game will be available exclusively on PlayStation 5, PlayStation 5 Pro and Xbox Series X|S, with legacy Xbox One owners able to stream it via Xbox Cloud Gaming, while PC and Nintendo Switch 2 players are left waiting for a later release.
Gaming industry producer Geoff Keighley told The Hollywood Reporter he expects it to be “the biggest entertainment launch in history.”
And the broader GTA economy could make for some interesting trades.
Console makers Sony (SONY) and Microsoft (MSFT) could see steady, lower-risk upside from increased hardware demand.
Underneath the console hoods, AMD (AMD) supplies the custom chips powering every native launch console.
GameStop (GME), Best Buy (BBY), Walmart, Target (TGT) and Amazon (AMZN) could cash in on high-margin accessory sales, including controllers and headsets. Accessory maker Logitech (LOGI) is giving employees an extra day off to play a video game of their choice.
Analysts also warn of a minor near-term box office headwind for chains such as AMC Entertainment (AMC) and Cinemark (CNK).
And Amazon’s Twitch, Alphabet’s (GOOG) (GOOGL) YouTube and Discord (DSCD) are poised to see a surge in viewership.
In the news this weekend, L3Harris Technologies (LHX) said it is working with the FAA in its investigation into what led to Friday’s nationwide ground stop.
Transportation Secretary Sean Duffy pointed to an upgrade being conducted by L3Harris at a remote site and a router issue as possible causes of the ground stop.
The decades-old, antiquated telecom system that federal air traffic controllers rely on will continue to have problems until it is properly funded and fully upgraded with modern equipment, according to FAA Administrator Bryan Bedford.
“But let’s not kid ourselves,” he said. “It will continue to break until we fix it.”
And for income investors, ConocoPhillips (COP) goes ex-dividend Monday, paying out on Dec. 1.
Chevron (CVX) goes ex-dividend Wednesday, with a Dec. 10 payout date.
Microsoft (MSFT) goes ex-dividend Thursday, paying out on Dec. 10.
RTX (RTX) goes ex-dividend Friday, also paying out on Dec. 10.
