NVDA earnings and revenue are doing fine

Investment Analysis Clubs Saul’s Investing Discussions
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All,
NVidia reported the following:

  1. Revenue was $30.0B which was up 122% YOY and $2.0B above expectations.
  2. Gross margin dipped from 78.4% to 75.1%. If there’s any angst about this earning report, this might be the culprit. The restrictions on China may be part of this drop.
  3. non-GAAP earnings were up 150% YOY. Wahoo!
  4. Increased it’s YOY revenue target to $32.5B.

The company said that they changed lithography masks to improve yield and that the Blackwell chip is functioning fine.

I expect there to be a few nervous investors due to the $3.1T market cap. As for me and my dollars, since Nvidia is doing well, I plan to hold my 18.5% allocation. I think Blackwell will give us a nice surprise on the upside.

Currently, the market disagrees with me and NVidia is down 3.6% as I write this.

Best,

bulwnkl

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I read the report last night, before the pundits got to it, and nothing in it suggested a reason for the big afterhours drop. I saw the new 32.5b revenue and that they beat this quarter’s estimates easily. That makes me want to lean toward our favorite defense here…they are sandbagging a bit. Yep. I think they are being cautious just because so many things happening.

But, even if this is a more of a realistic forward estimate, they are still well into the 70% margins and they say they will stay mid-seventies for a while. That is huge to me. Especially for a ‘hardware’ company.

It looked like they were gaining traction across all their product areas, and even gaming cards had a rise this quarter.

I decided to go against the after-market and any talking heads that focused on the “small” drop in margin. I put in my purchase order and am now back up to a full position again. Wish me luck!! LOL.

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I think some still think NVDA is typical cyclical semiconductor company so they keep thinking that it is expensive given that the up-cycle will eventually be over. Fact is, its forward PE is in line with where it has always been given the incredible revenue growth. And traditional sem companies don’t have anything like CUDA under their belt. Not to mention the extraordinary margins. This is not your father’s sem company, people. I think it keeps growing for awhile. And Jensen Huang is the best CEO in the world, maybe ever.

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The Semiconductor market has been in a deep down cycle for a couple of years now.

Only AI has been a grower and few Semiconductor companies are benefiting from that much just enough to keep the numbers from falling deeply negative.

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