5 Stocks Orbiting Nvidia’s Earnings Report Today

  • Stock Market Analysis

When Nvidia (NASDAQ: NVDA ) released its earnings report in February for (fiscal) Q4 ‘24, it significantly impacted other tech stocks. Having exceeded expectations and outperformed in data center revenue, the chipmaker bumped the Nasdaq 100 index by 3% into the next day.

This is not surprising with Nvidia’s current market cap gravity pull of $2.38 trillion. Having started the year with $1.22 trillion, this is an impressive 95% growth of value. Effectively, NVDA stock became a proxy for all things related to generative AI infrastructure, although AMD’s MI300X chips are heading to be more cost effective.

After the market closes on May 22nd, Nvidia is scheduled to release the earnings report for fiscal Q1 2025, ending April 2024. Considering Nvidia’s heavy gravity, let’s look at five stocks that are directly involved with the company or could be lifted by Nvidia’s AI tide.

SoundHound AI

Notwithstanding Nvidia’s disclosure of 1.73 million SoundHound AI Inc (NASDAQ: SOUN ) shares at the end of 2023, SoundHound AI is a sound investor choice in its own right. The Santa Clara startup leverages the need for natural voice interfacing powered by machine learning.

Alongside food chains like White Castle and Krispy Kreme, SoundHound’s AI-powered voice systems found themselves in leading auto brands under the Stellantis (NYSE: STLA ) umbrella, including Kia, Hyundai (OTC: HYMTF ), and Honda (NYSE: HMC ). Owing to the NVIDIA DRIVE framework, SoundHound is working toward AI interactions without cloud connectivity.

In February’s earnings for Q1, the company reported a 73% YoY revenue growth. Although still delivering a $33 million net loss, SoundHound ended the quarter with $226 million net cash. Year-to-date, SOUN stock is up 147% at present $5.14 per share. Nasdaq’s average SOUN price target is $7.17 per share.

Baidu

Before US export controls on AI chips, Chinese Baidu Inc (NASDAQ: BIDU ) was a major source of revenue for Nvidia. The company is still a major AI player since shifting to Huawei’s 910B Ascend and its own Kunlun chips.

Both Baidu and Alibaba (NYSE: BABA ) recently cut prices on their large-language model as the AI cloud-compute wars heat up in China. In a bid to corner the market, Baidu’s Ernie Speed and Ernie Lite LLMs are now free for business accounts.

The company’s income stream is stable owing to ad revenue and subscription services like Netflix (NASDAQ: NFLX ). In May, for Q1 2024, Baidu reported 7% net income growth and 25% YoY growth for its Apollo Go, an autonomous ride-hailing service.

Year-to-date, BIDU has tracked a negative 10% performance at $103.50 per share price. Given Nasdaq’s forecasted average BIDU price target of $155.06 per share, this makes for a very strong upswing potential.

Arm Holdings

In a different timeline, this British semiconductor company would operate under Nvidia. But after failing to acquire Arm Holdings ADR (NASDAQ: ARM ) for $40 billion in 2020, Nvidia settled for a minor $147.3 million stake. Arm is a highly attractive asset, considering its over 90% market share in the mobile applications market.

Rather than manufacturing chips, Arm relies on design licensing for its revenue. According to a Nikkei report, the company is set to launch AI chips by spring 2025, contracting with various manufacturers for mass production. This will be a boon to suppliers looking to wean off of Nvidia.

ARM stock is up 65% year-to-date. Wall Street Journal’s aggregated forecast puts the average ARM price target at $118.81 vs. the current $114.30 per share, with a high potential of $195.

Nano-X Imaging

Nvidia’s stake in this startup of $380k was a leftover from Nano X Imaging Ltd (NASDAQ: NNOX ) acquiring Zebra Medical, which Nvidia invested in 2017. Nonetheless, Nano-X got into the public spotlight aiming to reduce healthcare costs with AI solutions.

Specifically, to leverage Digital Tomosynthesis imaging tech to break the barrier for complex and expensive scanning and diagnosis. Combined with Nanox.ARC, the company’s ecosystem to make it happen, is facilitated by Nanox.AI and Nanox.Cloud.

Nano-X is scheduled to release its Q1 2024 report on May 28th. Previously, the company reported $10.2 million net loss, which was a significant reduction from $52.8 million net loss in a year-ago quarter. Year-to-date, NNOX stock is up 40%. Nasdaq’s average NNOX price target is $16 vs current $9 per share.

Mobileye Global

Mobileye Global Inc's (NASDAQ: MBLY ) claim to fame is its camera sensor, which facilitates ADAS (Advanced Driving Assistance Systems) technology. The company’s latest iteration is Mobileye EYEQ6 Lite, which collaborates closely with the Volkswagen (ETR: VOWG_p ) Group.

The Israel-based company directly competes with Nvidia, having noted in 2019 that “Nvidia must think very highly of us,” referring to Nvidia’s Safety Force Field (SFF). Mobileye CEO construed Nvidia’s document as heavily influenced by Mobileye’s own Responsibility-Sensitive Safety (RSS) published in 2017.

In April, Mobileye delivered Q1 earnings, showing a 48% YoY revenue decline and a $218 million net loss vs. a $79 million net loss in the year-ago quarter. However, Mobileye CEO Amnon Shashua is still optimistic, forecasting fully autonomous vehicles hitting the roads in 2026.

With its heavy presence in Israel, investors should note that Intel (NASDAQ: INTC ) also has a stake in Mobileye. As of February, Intel CEO Gelsinger alone owned 66,386 MBLY shares, alongside 456k shares across trusts. Since Intel is one of the main beneficiaries of the CHIPS Act, aiming to become the world’s second-largest chipmaker after TSMC, long-term Mobileye investments are likely.

Year-to-date, MBLY shares are down 33%. At $27.66, Nasdaq’s average MBLY price target of $38 per share creates a high profit potential. The upper forecasting ceiling for MBLY stock twelve months ahead is $53 per share.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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