Equities Week Ahead: Nvidia, Walmart & JD Sports

Nvidia Q3 earnings preview

Nvidia is due to report Q3 earnings on Wednesday after the closing bell, giving Wall Street an insight into the strength of the AI trend. The results come as the stock prices trade at an all-time high thanks to explosive growth.  The share price is up 194% year today, outpacing any of its rival chipmakers.

Wall Street expects Nvidia to post Q3 EPS of $0.74 on revenue of $33.2 billion, which equates to an 83% year-over-year increase in both the top and bottom lines. This is also up from Q2 when Nvidia posted EPS of $0.4 on revenue of $22.1 billion,

The data centre segment is its largest business and is set to bring in $29 billion for the quarter, a 100% increase from the same period a year earlier. Meanwhile, gaming revenue is expected to come in at $3 billion, up 7% from Q3 in 2023. Gross margins are set to hit 75%

in addition to whether Nvidia beats top and bottom line estimates, the focus will also be on the outlook for Q4, with expectations for $37 billion in revenue guidance.

Given the lofty levels at which Nvidia trades, even with stellar results and guidance, the share price can fall, similar to what was seen in Q2, given that the stock is priced for perfection.

 Investors will also be looking for insights from CEO Jensen Huang about the next-generation Blackwell line of AI chips. In the previous earnings call in August, Huang said Blackwell's production should pick up in Q4. He also said that demand was already outstripping supply at the time.

How to trade NVDA earnings?

Nvidia trades above its rising trendline dating back to the start of the year. The price reached an all-time high of 149.00 and has eased back slightly. The price is testing support at 140. 00 the June high. A break below here brings 132 into play the November low. It would take a move below here for a lower low to be formed, opening the door to 124 the 100 SMA. While the price holds above 132, buyers remain in control and could look to rise above 149 to fresh ATHs.

Walmart Q3 earnings

Walmart will report Q3 earnings on Tuesday ahead of the market open. The share price has risen almost 60% so far this year.

Walmart's results could provide clues over U.S. consumer sentiment at a time when inflation has ticked higher to 2.6%, up from 2.4%, and remains well above the Fed's 2% target. Walmart is expected to post improving sales as the big box retailer expands its customer base across all income levels.

Walmart is projected to report quarterly revenue of $167.73 billion, up from $160.8 billion in the same quarter last year. The retailer is expected to see a net income of $4.24 billion, up from $453 million last year, when negative changes to the value of some investments hit its profits.

22 of the 23 analysts covering Walmart tracked by Visible Alpha rate the stock as a buy, with just one analyst giving it a hold rating. The average target price is $86.43

How to trade WMT earnings?

Walmart trades in a rising channel dating back to the start of the year. The price reached an all-time high of 85.809 last week. Buyers will look to rise above this level to fresh record highs. Immediate support can be seen at 80.00, the 50 SMA. Below here, 76.50 is the lower band of the channel and the 100 SMA. A break below here negates the near-term uptrend.

JD Sport Q3 results

UK sportswear retailer JD Sports will report on Thursday, November 21. Earnings will come as the share prices is still down 25% year to date and after Chairman Andrew Higginson warned over price hikes following the Budget.

In its interim results, JD Sports saw revenue increase by 5% to £5.03 billion, and profits before tax were up 2% to £405.6M. Europe, North America, and Asia Pacific all posted double-digit sales growth. However, the UK remains a challenging market after sales fell 4.6% in H1. Should this trend continue, the market hopes there won't be further downgrades to the full-year outlook.

The market will also watch for comments regarding the outlook following the autumn budget, which could increase prices for shoppers. Chancellor Rachel Reeves announced an increase in National Insurance paid by employers and a rise to the minimum wage, which could be passed on to customers.

Investors will want to see how the July completion of the takeover of US Hibbett, which will increase the group's footprint in the US, is progressing.

How to trade JD results?

JD Sports ran into resistance at 160 and rebounded lower, breaking below the 50, 100, and 200 SMA. The price is testing support on the rising trendline dating back to the start of the year. A break below here opens the door to 110, the July low, and 103.00, the 2024 low. Should the support at 116 hold, buyers could look to rise above the 200 SMA at 124. Above here, buyers could gain traction.