Mid-Week Wrap: 21st February 2024
21 F E B R U A R Y 2 0 2 4 • I S S U E 11
Market Mood
US stocks experienced a sell-off on Tuesday, February 20th, following the extended President's Day weekend and in anticipation of Nvidia, one of the "mag 7" stocks, releasing its Q4-23 earnings on Wednesday, February 21st. Nvidia itself saw a decline of -4.35% on Tuesday, despite its year-to-date rise from $495 to $694, marking a 40% gain. Despite Nvidia's impressive price gains this year, its price/earnings ratio (P/E), currently at 32x, has actually decreased over the past year due to the company's rapid earnings growth.
Nvidia's P/E ratio is not the highest among the "mag 7" stocks, with Tesla at 60x and both Amazon and Microsoft at 32x, in line with Nvidia. Options markets are indicating that the company's value could fluctuate by approximately $200 billion (around a 10-12% price move) following the earnings release. With these factors in mind, investors are bracing for potential volatility on Thursday, preparing for any significant market shifts.