Perhaps the biggest factor in determining the price of a share is earnings. If people expect a company’s forecasted earnings to rise, the share price of that company shall rise almost immediately. Conversely, investors predict company earnings to fall, the share price shall also decline.
Then if down the road, actual earnings exceed the expected ones, the price will jump immediately; the company has become instantly more valuable to own. Similar reasonsing applies if the actual earning are less than expected.
Unless,
take the case of the giant processors, chips. and artificial intelligence company Nvidia. Nvidia’s price plunged 8.48% today despite having actual earning exceed predicted ones.
WTF happened?
Investors had become used to actual earnings exceeding expected ones.
So,
Investors were expecting expected earnings to exceed earnings. So, if expected expected earnings are expected to exceed expected earnings and they don’t, the price of a share of that stock will fall big time.
And that’s why Nvidia’s shares fell in value.
Simple.
– Paul De Lancey, The Comic Chef, Ph.D.
My cookbook, Following Good Food Around the World, with its 180 wonderful recipes, my newest novel, Do Lutheran Hunks Eat Mushrooms, a hilarious apocalyptic thriller, and all my other books, are available on amazon.com.
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