Stocks posted significant gains last week as both the S&P 500 (SNPINDEX:^GSPC) and the Dow Jones Industrial Average (DJINDICES:^DJI) rose by more than 2%. The increase left markets up between 4% and 5% for the year.
Third-quarter earnings season will continue to draw investor attention over the next few trading days. Below, I'll take a closer look at the announcements that could send shares of Home Depot (NYSE:HD), NVIDIA (NASDAQ:NVDA), and Tilray (NASDAQ:TLRY) moving in the week ahead.
Home Depot's customer traffic
Home Depot announces its third-quarter earnings results on Tuesday morning in a report that should tell investors a lot about the strength of the housing market. Homebuilder stocks were hit especially hard during the stock market sell-off last month, after all, as fears mounted about rising mortgage rates and other weakening economic indicators.
The retailer's last report showed no signs of a slowdown. In fact, Home Depot raised its 2018 outlook in August after its 8% sales growth pace beat management's targets.
Customer traffic will be a key metric to watch on Tuesday given that it fell slightly in the first quarter but bounced higher by 5% once warmer spring weather arrived. But investors will likely be most interested in what CEO Craig Menear and his executive team have to say about the strength of the broader industry as they issue the final regular update to their 2018 sales and profit forecasts.
NVIDIA shareholders have endured extreme volatility heading into Thursday's report, with the stock losing 25% in October. But at least some investors believe the slump has created a good opportunity to buy a high-performing stock at a more favorable price.
The chipmaker's business is benefiting from surging demand in its core video game segment, and in newer revenue lines that support artificial intelligence and autonomous driving capabilities. These trends allowed sales to rise 40% last quarter as gross profit margin shot up to 63% of sales from 58% a year earlier.
NVIDIA's third-quarter forecast predicted sales of about $3.25 billion, which translates into 23% growth year over year. Most investors who follow the stock are expecting earnings to rise at a faster clip, to $1.71 per share, thanks to continued profitability gains. NVIDIA's fourth-quarter forecast should attract plenty of scrutiny, too, as shareholders look for signs that the company continues soaking up market share across several promising tech industries.
Tilray's market access
Tilray is expected to book sales of only about $10 million -- along with a net loss -- in its third-quarter earnings report on Tuesday. But that modest operating outlook, typical for a young business, hasn't stopped investors from assigning the marijuana stock a head-turning valuation of over $10 billion. The extremely volatile shares nearly reached a $16 billion valuation, in fact, before a sharp sell-off in October sent prices lower. Huge price swings continued into the early days of November.
Some investors see plenty of room for Tilray's stock to give back more of the massive gains it logged since its initial public offering in July. But management aims to use the resources from that stock sale to build out Tilray's cannabis processing and cultivation capacity as it caters to the Canadian market while exporting to countries like Argentina, South Africa, and the U.K.The company will likely have good news about demand and pricing trends in these areas on Tuesday. However, Tilray will need to secure a dominant position in a much-larger global market if it hopes to ever earn its premium stock valuation.