Nvidia, CrowdStrike, Marvell Test Key Levels Ahead Of Earnings | IBD

Hey everyone and welcome to earnings cheat sheet for Friday, August 21st. It's Alexis Garcia and Ed Carson here and we'll be taking a look at some key upcoming earnings reports to help you prepare for the week ahead. Ed, I think all eyes will be on Nvidia this week. Uh, but what else do you have for us? Yeah, definitely going to take a look at Nvidia, but also Marll, another AI chip maker, and Crowdstrike. >> Let's go ahead and start with Crowd Strike, which is scheduled to post Q2 earnings on Wednesday, August 26th. Earnings for the cyber security play are projected to rise 26% to 29 cents per share. Meanwhile, revenue is expected to climb 23% to 1.44 billion. Here's why we'll be watching Crowd Strike. Uh we'll be looking at net new annual recurring revenue. That's always a key metric. Uh we'll also be looking at annual recurring revenue for the AI detection and response product. That's a newer AI based metric that rose 250% from the previous quarter and has a pipeline of $50 million. And when we're looking at Crowd Strike and cyber security in general, uh we really want to see when AI will become a real tailwind, Ed. Uh cyber firms are really bullish on this AI field spending. Uh but maybe that uh impact's not showing up just yet. Uh we had Bank of America recently raise its price targets on cyber security stocks which could be good for Crowd Strike stock but uh what is on your radar with Crowdstrike earnings ahead? >> Yeah, I want to see how it delivers on all those things and yeah when when that growth tailwind comes in. Crowd Strike is still sort of you know seems to have really picked up momentum again after that whole outage from a couple of years ago that sort of set them back fundamentally. So some of the comparisons are pretty easy this year, but the revenue growth is has remained solid throughout. Yeah, I've just looked to see is that real growth drivers because there's just a lot of excitement about that AI is going to be AI is such a risk to security that that's going to fuel demand. It's just that you know when is that really going to pick up and yeah so and for this one and a lot of other names. There's a lot of names in this space that are reporting this coming. >> Yeah. You know we've been hearing stories of these rogue uh AI uh agents. So, uh could be um an opportunity here. But looking at the chart here, Ed, uh Crowd Strike did hit highs recently, uh around the 230 level, but it's really sold off uh sold off more than 5% on August 19th. That selling has continued. It's now testing its 50day line. So, what are your thoughts here? because it can rebound here if it clears recent highs potentially actionable but um a lot of volatility in this chart. >> Yeah, there's been a lot of weakness in some of the leading names, cyber security and other software names recently. So, it's just been tough tough just in general when people trying to hop from sector to sector. >> Uh this seemed like it was doing great, but this is the second straight time it's basically run up and then come back to the 50-day line. It's really the third time in a row that it had run up and then had a pretty big pullback. that first big run up, it only pulled back a little bit that time. So, that one was more understandable. The last two times if you it would have been hard to get into them. Like if you bought there, you know, since the initial breakout or initial moves back in April and back in May, it's been hard to get into this name and really make money off of it. Uh so I want to see how that goes. A bounce off the 50-day line could be actionable, but it's also been sort of straight down. It's we generally like to see things more gradual. Now, it did come really strong last time and it bounced right back up. So, not saying it can't happen, but that's sort of unusual to see something so V-shaped. And uh again, maybe we're in for it again. Uh but yeah, on a weekly, I think it looks going to look pretty dramatic about how sharp that is. >> Yeah, that's not really Yeah, not really what you want to see >> uh in that regard. It's not the worst in the world, but it's a pretty good size drop. So, you know, this is going to be important earnings earnings for this. You could see this one really selling off. If you bought back in May, well, you still have, you know, probably have a decent gain. So, you can choose to be holding it. You probably if you you sat through these other name pullbacks. So, you know, but there are earnings coming up. But a decisive break of the 10e line might be something that investors who owned it for a while might be thinking, well, maybe I want to take some partial profits on in that front. and and recent buyers, they've lost all most or all of their gains and so that's that's more troubling. >> Yeah. And in terms of fundamentals, Ed, uh anything jumping out to you uh with Crowd Strike? >> Again, pretty steady revenue growth. The earnings are bouncing back after a tough year as expected. So, it looks like it's going to be that steady performance. It's obviously not growing like it was at the beginning of the decade when it was just really coming on. So, people have to keep that in mind. But uh this one seems to have steady growth and investors like that. Investors like growth that you can count on. Relative strength line still looks good here. Uh the uh the up down volume is an okay 1.1. So you know generally things are looking pretty good. Definitely one to be watching. Um it's just it isn't it's just sort of a tricky market. It's not a bad market, but it's a tricky market overall and for this sector. >> All right. Well, let's move on and take a look at Marll Technology, which is expected to report Q2 results on Thursday, August 27th. Earnings for the chip design maker are expected to rise 39% to 93 cents per share. Revenue is projected to climb 35% to $2.71 billion. And here's why we're watching Marll. Uh it looks like Marll could be taking some of those Google uh custom chip uh business away from Broadcom. uh but will need more clarity on that. Um analysts are debating it and Ed on Wednesday uh Marll did make an SEC filing saying it did sign a deal with Google on July 29th to develop a range of custom chips uh for the uh computing giant. Uh they also issued Google a warrant to purchase up to 59 million shares of Marll stock. So that could potentially impact some price action as well. But uh what are you looking at with Marll and then you know we have it's a big week for chips with Nvidia up. So what's your thought? >> Yeah. So that you know this will be coming in around the same time uh as uh as Nvidia actually a day later. So it'll be interesting. It could move up or down and shake people out or draw people in and then could go the other direction on its own earnings. So that's a risk. But uh yeah, the earnings growth is supposed to accelerate. Looks like it's another quarter of acceleration for revenue growth. It teams up a lot of its growth has been with Amazon and there that's been where some of the takeoff has been is that you know when you know in the stock but uh yeah Google would be a big thing. There have been talk of that in the past. I don't know when that will really translate into revenue for them. That might be a while but obviously teaming up with a couple of the big hyperscalers could be a big deal. So yeah want to know more about that. Again, a lot of that's going to be priced in, you know, so what they have to save for it to say, well, you know, it's actually not that big. It's not going to be until 2030. That could be I mean, again, I have no idea what, you know, it may be very bullish. No, we expect this to really come on and we see a lot of growth opportunities. We see other hyperscalers jumping on. Yeah, it could still move, but it'll be interesting to see how how that you know that what's presumably will be strong earnings, how that's actually received by Wall Street. >> Yeah. And Ed, in terms of the chart action, uh, we saw Marll with a move on Wednesday, a gain of almost 10%, retook that 50-day moving average. Um, so again, it's reclaimed a key moving average. It's an IBD tech leader. Um, so thoughts here then on how to handle Marll ahead of earnings? >> I mean, it depends. Look, if you already had it from that big runup, I mean, look, you've dealt with that enormous sell-off and it's coming back up. So, you're not going to sell. I mean, presumably just that just doesn't seem likely. Uh, and it's, you know, you have a big gain from like well under 100. So, you're still up more than 100%. Recent buyers, I don't, well, I don't know where the recent buyer would have been. Uh, this, you know, it's at a key level. Obviously, the Google News is lifting it up. It just also sets there's a lot of expectations are built in. If this were a better market, people would be saying, "Hey, look at that." But given the weak market or not not the weak market but the challenging market, a lot of other chips struggling around these levels and earnings coming up, I think you have to wait. I don't know what will be available. I mean, if this gap's up 40%. Do you want to jump into something like that in this kind of market? If it obviously sells off, you don't want to. So, it looks close to being actionable, but it's not clear that you'll actually get, you know, something off of earnings that uh that will feel fairly uh low risk. >> Yeah. And let's just look at the weekly chart here, Ed, because as we can see, uh, retaking the 10W week line here after that pretty major pullback um, earlier in the spring. Uh, but anything in terms of fundamentals dropping out to you? I mean, a composite rating, EPS rating, all really good at a 94 93. Um, so anything else that you'd like to say about Marll? >> Yeah, well, the growth is supposed to pick up next year on the earnings and revenue front. See, a lot of names are supposed to cool off a little bit. I mean, uh, but some of these, uh, this one was a little slower to really pick up steam. It wasn't really growing 2023, not much in 2024, but it's picking up now. So, it's nice to see that fundamental story. Seems like there that earnings line has been going very strong for a while now. Uh, should continue to be strong for the next several quarters, it seems like. >> All right. Well, let's go ahead and move on to Nvidia, which will report earnings on Wednesday, August 26th. The AI Titan is expected to see Q2 earnings rise 99% to 209 per share with revenue also rising 97% to 91.99 billion. And here's why we're watching Nvidia. Uh the key question will focus on Nvidia's technology mode and whether it's sustainable and of course all of its circular financing deals. Uh we'll also want to know if the Vera Rubin rollout is still on track. that product very key to Nvidia's future revenue growth. And at Nvidia was recently in the news uh for some data center deals uh one with Open AI. It's also trying to play uh matchmaker with its chips and some Nordic companies uh recently. Uh but when it comes to Nvidia and the AI trade, um I I think we've really reached a turning point here where a beat and raise quarter might not be enough. >> Might not be enough. Uh I think especially in this environment and that sometimes it it hasn't always performed well on earnings. So we'll see. We'll see. Revenue growth is supposed to accelerate for a fourth straight quarter. I mean that's really impressive. I mean it's uh earnings are supposed to basically double. Uh again it's like and the comparisons are just so tough because this one has been growing so strongly for so many years. Uh it's just Yeah. what can you really do to really wow um wow Wall Street because that is really great you know but people will want to see are you going to see some of that future growth and again it's a vibes thing you can say wow look at this all these circular deals it drives demand it may benefit from some of the financing so some of these other things are getting warrant you know they may have warrants in other these companies so as it can be seen as a virtuous cycle but if you think oh boy this is going to go down if it all goes down in flames if If Nvidia is just sort of spinning more plates and if you feel that's going to fall along with all the other circular deals that are not involving Nvidia, then that can be negative. So you could look at the same you could say the same words and I say this sometimes with Tesla. You say the same words and the market will react differently at different times. And so you could say that oh there's all these opportunities and moes because of what Nvidia is doing. But if that if they if people turn against AI trade that could become seen as a real negative for that. So again, very hard to know how the markets will react to all this, >> right? Well, in terms of the chart action, Ed, uh, Nvidia currently building a cut base with a 23654 buy point. Uh, but you know, shares have really struggled to, uh, make any sustained progress for the better part of a year. Uh, the stock recently uh, rebounded from its 200 day line. It followed that up a few days later by retaking the 50-day line. uh potentially uh a handle here, Ed, with an entry of a 22792 uh price level. Uh but thoughts here because potentially actionable here, but again, we have earnings in another week. So, uh what are your thoughts on how to play Nvidia? >> Yeah, when I made that gap up above the 214 level, I think that might have been the follow-through day and much like the market. So, when it gapped above it, uh you know, some people would have said, "Okay, I'm going to buy that. I'm buying the trend line break that blah blah blah. Okay, that was reasonable to follow through day. A lot of things removing this is a relatively safe. But you can see, you know, right here it's undercut those levels. So if you bought the gap up, you're down. And that's just so with a lot of things. It's not down terribly, which is one thing. This one does not have a crazy ATR. So yes, on earnings and other things it can fall a lot, but on any given day it's probably not going to fall 15%, you know, like and honestly there's a lot of names that can do that. So there's something there. It does have a handle. It looks like it's going to be formed certainly by the time earnings are there. Just needs another day on this particular day. So that would be an entry, but it's also there's there is the risk that you'll have there is a history not all the time, but you'll have where earnings either reverse lower on the day or you rise and then fall the next day. So, you know, it would just make >> I think it's happened like the last four quarters uh with uh >> yeah, it just feels like, you know, a few days after earnings, are you up? And it usually has not been the case, you know, and so now maybe this time is really it. Maybe it has gone sideways enough because if you go to a weekly chart, okay, the relative strength line doesn't look good, but then you look at the earnings line, all it does is go up. uh this actually has a pretty low uh forward PE. It's not like this richly valued stock, you know, despite delivering amazing growth. There's there's obviously doubts that this growth the growth is supposed to slow, you know, next year and maybe just even later, you know, later this year um and and then actually, yeah, uh later this year and uh then into, you know, next year, but still be really strong. So, I mean, you can spin a tail. I mean, it would not be shocking to see this go on another run because it has continued to deliver. But I think around earnings that just makes it tough because it could flash a buy signal. It could flash a clear buy signal and this if you do that just be watch out for that rip tide. Uh, you know, it just it can do that to you. Um, and I would also say if you're in other stocks that are in this area, not just chips, but in optical, if you say, I'm going to go, oh, that's flashing a buy signal. Everything's going great. Well, that riptide could come if Nvidia reverses lower as well. So, really important report and just just be just watch out for that around earnings. >> Yeah, as we mentioned, it's had a pattern uh at least in the last uh four recent uh quarterly reports. So, something to watch with Nvidia stock. Um those were some of the top names on our radar. Uh but it's a big cyber week. So, let's go ahead and look at some more names there. Uh starting with Rubric at uh earnings there on August 27th. Uh this is another one uh looks like it's really kind of finishing out uh maybe a larger cup base here. Um but near some recent highs uh at around the 100 level. Um so thoughts here with Rubric? >> Yeah, I think it was actually when it got above 90. You know, there's a lot of cyber security names and like sort of that area there sort of treated this really ugly handle. Uh but now you can sort of see that what's going on here is a little bit tighter handled to this long consolidation. Uh it struggled for a while. Uh the downside is a lot of other cyber security peers are struggling a little bit more. This one obviously moved up. It hasn't given up as much. This will move a lot on earnings. This one has big gap ups and and gap downs are really big moves. So just be aware of that. Uh but it is nice to see it holding up better. All right, let's go ahead and looked at Octa, another name with earnings on August 26th. Uh, this one, Ed, looked like it had been kind of trading in range. Another one that's been volatile, but breaking below the 50-day line on August 20th here. So, give me your thoughts here. >> Yeah, it's sort of straight down. So, I just don't know, you know, how how it'll look even if it comes back up. It it just sort of looks a little damn odd that way again. Like Crowd Strike, it's gone down and up, down and up very quickly. So maybe it will again, but it it's an unusual thing how that's going. And also when earnings come out and then others come out or right around it can see all these names could be sort of buffeted back and forth. >> Yeah. How about uh your thoughts on Sentinel One earnings there on August 27th? >> I think I remember this being referred to once as a poor man's crowd strike like a little maybe not as sophisticated but also cheaper for for customers. Uh back to the buy point, not terrible. I can imagine with some strength it could be actionable. Uh you know this one this one is a little bit you know it doesn't have the growth seems to be slowing on the revenue side at least over time. Uh so there is something like that but it is interesting. It's one to watch >> and uh we have workday as well uh earnings there on August 27th. Uh this one really coming up off the bottom, Ed. Uh we had this uh really uh impressive gain here back on August 13th uh up over 17%. So uh thoughts here? It looks like it's maybe building the right side of a of a pretty deep cup. >> Yeah, I mean part of it it gapped up because there was buyout buzz like maybe it was a private equity that hasn't happened yet. So I think that'll be a lot of interest and that lifted a lot of the especially the the beaten down software names like that are trying to rebound like workday. So uh maybe putting a floor under those names if if that really doesn't cut me. So I think a lot of the interest will be what management has to say about that. Uh but there will be more broader things because there's a lot of these big sort of lumbering software makers that are trying to come back. So it will be important just the earnings themselves. >> Yeah. Yeah. And how about a look at Salesforce earnings there on August 26th? Another one, Ed, uh chart, not super impressive, but it is in a cup base with a 21134 buy point. It's gotten back above the 200 day line. Uh so thoughts with Salesforce? >> I mean, if it goes above that buy point, I mean, again, I would say you could have said it'd be an actionable ahead of earnings like on a day like today, but earnings are coming up. And even so, we generally like to see a prior uptrend and then a base formed all entirely or almost entirely above the Tunday line. It doesn't have that. It just seems like even among the lumbering software names, this has some been somewhat of a lagard. So, it's more about it's more about what it means for the sector than I think this particular stock at least for me. >> Yeah. And how about uh staying in the cloud theme uh earnings there on August 26th? Uh thoughts here? >> Yeah, that's been coming up. it seems like to be in no man's land where it's just like it's making way up. Uh but this is sort of in somewhat in this data storage space in its own way. Uh but it's falling apart where some of the storage storage companies have held up well. Uh so you know again I think this needs to set up set up a handle or some such uh before being actionable but it is on the comeback. >> All right. How about a firm holdings earnings there on August 27th? Uh this one again it's been uh trading around the 50-day line. Uh so thoughts here. >> Yeah, maybe if it gets about 80 82 on earnings or and then there's even just the 86. It's pretty wide and loose, you know, as well. And that that has sort of been its history. Uh buy now pay later is exciting and there's been a lot of payment stocks have also come off highs recently. So again, just you know uh so it's it's high risk. It's It's high. It's very vol. >> All right, how about we jump over to SEC Corp, Ed, uh earnings there on August 25th. Uh this one had a nice run out of a breakout back here in April. Uh it's pulled back. It's reclaimed the 50-day line, but now it's sold off over the last few days. It's below the 50 and the 21day moving averages. So, um what's going on with SIME and your thoughts here? I mean, this is like you could cover up the name and you almost have trouble figuring out among the 30 or 40 names that have done this in the past few weeks. I mean, uh, rebounding off near the 20 200 day line, getting back above the 50, then selling back below. That is just the story of chips and AI plays over the last few days and weeks. I mean, it needs to get back above those short-term highs in my view. And if it went straight up, it would look odd. So, this one may take time uh to get back up. Uh but again along with Marll and and you know Nvidia you know important important marker on how chips are doing. >> Yes. >> Yeah. How about another data storage play uh Everpure with earnings on August 26th. Uh this one uh trading just below a profit taking zone Ed but had a really nice runup here from this breakout uh back on August 10th. Um so if you are in this maybe you have some decisions to make uh but thoughts here. Yeah, you could take some partial profits. Just sort of depends on how you are. I want to do that. Don't have to necessarily. Uh, you know, maybe it eventually forms an add-on buy point, but this is pretty extended uh in my view and does make some really it can make some really big moves either way on on earnings. >> How about we look at DICOM Industries, another digital infrastructure name, earnings on August 26th. Uh, this one here has really kind of struggled uh since this breakout back here in late April. It's now testing the 200 day line. >> Yeah. And there was that big gap up that happened on earnings, but then then the market sort of sold off and it hasn't come back. Uh this needs to get above I'd say like the 450 level, which would sort of get you back above the old buy point. At least some of the trading would have been dig, but I I don't know. It looks pretty messy. It looks like maybe it needs to get up even higher than that, then pause. Uh this has not rebounded like a lot of the others. This is close to lows. And so even within the AIish space, this seems like a lagger right now. >> Okay. Well, let's look at H Higho Corp, uh, another tech manufacturer due on August 25th. Uh, this one uh broke out back here on uh June 30th. Uh, hasn't really done much since, but it's really uh taken a dive below the 21day line, Ed. Um, so thoughts here? Yeah, this is in the aerospace defense area and aerospace defense in the last few days uh has weakened again just like you tell you this little you know uh little going from burner to burner and just getting ouch ouch ouch uh it's you know sectors that look pretty good and then they weaken and so again this looks uh you know it's right around the buy point right around the 50-day line >> I could imagine with earnings that this bounces and does something nice but >> it again it been tricky and you know it has a tendency it broke out then fell back and then came back up and it's fallen back. So it hasn't been you know >> with a lot of things with a lot of things if you make buys off of strength just you know some a lot of those things aren't working or not working for long so you have to have rules to make sure you don't get burned by them. >> Yeah let's look at Viva Systems as a software uh biotech firm. This one has earnings on August 26th. Uh love to get your thoughts here. >> Very deep base. Uh it's nice that it's kind of this is very life science focused. Uh you know solid you know certainly has solid consistent growth. It just hasn't had much of a you know the stock hasn't performed pretty fairly well but it seems like a no man's land. I I don't it hasn't had much of a shake out a couple of days and back up. I don't think that would have shaken anybody out. Anybody was a recent buyer and that's what you like to see handles do. Uh so and it still is still working to fill the gap on that earnings report from a couple months a couple you know a couple times ago. So, I I think this needs to to form more of a handle, especially given the size of that that base. >> How about we take a look at Burlington earnings there on August 27th? Uh, another one that's really sold off after a breakout uh back here in July. Um, but thoughts here, >> yeah, this sector is all of a sudden was looking strong. Now, not so much. We obviously had Walmart, but then more of a close pure TGX that has struggled. Uh so yeah, this one this one, you know, sort of was flashing sell signals in these last couple days and uh with a 50-day in the sell zone. Um I think it needs to set up again, form a new base. It is probably what it needs to do. >> All right. Well, uh let's wrap with a look at a group of Canadian banks uh reporting next week. A Ed, uh let's start with Toronto Dominion uh earnings there on August 27th. Uh this one was looking pretty good. It's really sold off uh this week. It's below the 50-day moving average. Uh but talk to me about TD. >> Yeah, I'm not sure what's going on because all of these names look pretty similar. You know, if anything, there's been some positive news about maybe lower tariffs on some Canadian goods, but yeah, this was very strong. This is sort of flashing a sell signal even for people who especially with earnings coming up for those who bought on that breakout. And it's been a nice run. don't have to sell because you definitely have a cushion, but it's going to be pretty looks like it's going to be decisively below the 10-week line by the end of this week. Uh, which would be a signal to maybe at least take some partial profits. And I think if you look at uh some other banks that are reporting, you're going to be showing something similar. But they've had a good performance. It's just uh at least on the earnings front, uh maybe they need to take a break. I mean, you know, for that's a pretty decent run for some slower growth companies. Not slower growth. have uh Royal Bank of Canada also reporting next week again looking very similar uh really selling off this week below the 50-day moving average. Uh Bank of Nova Scotia also reports next week at uh very similar story here. So uh any final thoughts uh with uh Canadian banks before we wrap? >> Yeah, they've had some again some of them have had pretty good EPS growth in the last few quarters. They're not amazing growth, but solid growth over time. Damn, they just may need a break or at least that's what the market is saying. Uh market has taken a breather on these names for whatever reason. >> Don't we all just need a break sometimes? Doesn't really help us though. But uh thank you for your insights today. We really appreciate it. >> Thank you, Lexi. >> And that wraps it up for this episode of earnings cheat sheet. If you want more market analysis, be sure to tune in to Stock at Market today. That goes live after the closing bell. As always, thanks so much for watching and we'll see you right back here next week.