NVDA

[xenotedvr1]

I imagine a lot of folks here are somewhat familiar with NVIDIA Corp, but for those who may not be, or maybe not thought of it in the context of stocks we look at here, I figured I would give it a try.
They just released great earnings today after market close, and it has been on a great run, so there could be a little volatility. But I think still offers a lot of value, and definitely worth a look.

NVIDIA (NVDA)

They are what what they call a “Visual Computing Company”, founded in 1993 so have been around a while. CEO Jen-Hsun Huang is co-founder of the company.

What is a Visual Computing Company?
Well, they traditionally have made graphics processors for computers and that is what they are best known for. But they are a lot more than what powers the amazing visuals in some kid’s laptop playing video games.

They break down into 4 categories:

Gaming

Professional Visualization

DataCenter - Also automated learning machines, or AI (artificial intelligence

Automotive

“They also integrates its GPUs into powerful mobile system-on-a-chip (SOC) processors, which drive supercomputing capabilities for tablets and online gaming and entertainment devices, as well as autonomous robots, drones and cars.”

So they have their stuff in a lot of things currently being used, and in a lot of things that should be taking off as technology advances.

Here are the numbers as I calculated.

Revenue (in billions) EPS (non-GAAP)
2Q2017 1.43 .53
1Q2017 1.30 .46
4Q2016 1.40 .52
3Q2016 1.31 .46

2Q2016 1.15 .34
1Q2016 1.15 .33
4Q2015 1.13 .35
3Q2015 1.23 .39

24% yoy rev growth for current qtr
56% yoy growth EPS (non-GAAP)
Current price $59.70 at close today. ($61.45 after hours)
PE 30
1YPEG 0.76

Revenue is expected to be $1.68 billion, plus or minus two percent.

Please check my math, and let me know if anything is out of whack here. My first attempt at this on this board, so I welcome all thoughts and appreciate any feedback.

Just trying my hand at contributing a little after I have received so much from this board.

Kevin

[gettinsumcoffeee]

Hi Kevin,

I opened a position with NVDA in early June. I am up 25% since then.
my position is a small 3.3% position, but so far so good.

When I first bought AMZN in 2014 and again in 2015 I did so because I finally came to the conclusion that the share price was going to keep going up whether I owned it or not. Now it is around a 9% position for me and after buying and trimming several times I am up 158%

NVDA is a totally different business and story, but my reasons for buying it are similiar to why I finally bought AMZN. I also like that Tesla is using NVDA chips for the ongoing development of autonomous driving technology.

Thanks for your post…I am happy about these results.

Frank

[IRdoc]

I think your 4Q2015 EPS is off, should be $0.43 instead of $0.35 (which is the GAAP number). Slightly lowers growth, 1YPEG is closer to 0.9.

[kevinh68]

Just thought I would chime in here.

There is a small correlation between Amazon and Nvidia. And Tesla and Nvidia. And any company that is developing a machine learning strategy and Nvidia.

Nvidia is making the processors that allow for massive parallel computing power - the kind of processing required to create a “neural network” akin to the way the human brain interprets information.

This core capability is what will drive countless applications. From self-learning systems to predictive analytics.

Elon Musk of Tesla fame recently tweeted about an autonomous driving system that is going to “blow your mind” when you see it. They are using Nvidia’s systems to build out that capability.

Amazon is using Nvidia’s systems for the processing power behind its voice operating system known as Echo.

There are scores of use cases for Nvidia’s capability including applications we haven’t even dreamed up yet. Nvidia is one of my core holdings (since 2006!). And it sounds like they’ve recently made the cut for the 1YPEG screen based on the math I saw above. Nice!

I highly recommend a look at this fast growing company in a market poised for exponential growth.

Best,
–Kevin

[Smorgasbord1]

I bought in July 2009, so after 7 years with automatic dividend reinvestment I’m up over 470% (or 28% annually, compounded).

It was slow at first, and not with some major hiccups a year into it, followed by a peak in early 2011 that it wouldn’t break again until last year. Luckily I just let the shares lie dormant in my IRA.

The knock against NVIDIA has been that they do graphics cards for PCs and we all know that PC sales are declining. And while NVIDIA has been making a big push into embedded and Automotive in particular, for a while there its advantages weren’t tangible. The old Tegra 3 chip, for instance, wasn’t really better than standard ARM designs from Freescale or TI, and Qualcomm’s snapdragon was getting a lot of attention.

But lately, NVIDIA seems to have broken through not just technically, but business wise. I admit I haven’t followed the details closely, but am (finally) enjoying the ride. Now I have to get over anchoring on the price at which I bought it and figure out if/when to buy some more.

[xenotedvr1]

And this today,

“More than the beat itself, the underlying trends over the last quarters are eye-catching (from low single digit growth in Q1-Q2 last year to low teens in Q1 and low twenties in Q2) and confirm that Nvidia has entered into a new, massive growth cycle. And in line with our scenario and contrary to analysts’ expectations, there will be no revenue slowdown in the second half of the year but a continued acceleration as the Q3 revenue guide points to 29% growth and as Q4 will likely grow around 20% (vs. a first-half revenue growth of 19%).”

http://seekingalpha.com/article/3999139-nvidias-ludicrous-mo……

Kevin, the other Kevin

[PuddinHead42]

Yep, great company with “multiple possible futures” love the autonomous car market and datacenter/massive-processing opportunities. Intel is trying to get into the car business with a partnership with Mobileye, so watch how that goes.

http://stockcharts.com/freecharts/gallery.html?nvda
has had a monster run since May, so I would not jump it with a 100% position here.

ChecklistRating
Composite Rating 99 Pass
EPS Rating 93 Pass
RS Rating 98 Pass
Group RS Rating A+ Pass
SMR Rating A Pass
Acc/Dis Rating A- Pass

(Long NVDA)

[PuddinHead42]

cebook (FB), Microsoft (MSFT) and Amazon.com (AMZN) helped Nvidia (NVDA) grow “a second leg to run on” outside gaming, analysts said Friday, after the Tesla Motors (TSLA) partner reported 110% growth in fiscal Q2 data center sales.

IBD 50 stock Nvidia rocketed to a record high for the sixth straight trading day, closing up 5.6% to 63.09 on the stock market today. Shares are up more than 80% this year.

But Needham analyst Rajvindra Gill says Nvidia stock is trading at a premium. To justify that, Gill says he would need to see 15%-20% core growth in 2017, but he only models 11%. He retained his hold rating on Nvidia stock.

Others were more bullish. “Tough to find much (bearish) to pick on here,” Canaccord analyst Matt Ramsay said of Nvidia’s fiscal Q2. Ramsay kept his buy rating on Nvidia stock but boosted his price target to 70 from 67.50.

“We maintain our belief that Nvidia’s transformation from a PC-leveraged GPU supplier to a diverse visual-computing company is essentially complete,” he wrote in a research report.

and

For fiscal Q2 ended July 31, Nvidia reported 40 cents earnings per share on record sales of $1.43 billion, up a respective 700% and 24% vs. the year-earlier period. Those metrics easily topped analysts’ model for 37 cents and $1.35 billion.

Nvidia’s gaming unit brought in $781 million, growing 18%. There, Nvidia still has a major runway with the new Pascal 1070/1080 GPUs still “an immaterial percentage” of the mix, and the circa-2015 Maxwell predecessor only at 33%, Mizuho analyst Vijay Rakesh says.

Gaming units have grown at a 9% compound annual growth rate over the past five years. Meanwhile, average sales prices have surged 11%, Rakesh wrote in a report. He kept his buy rating on Nvidia stock and lifted his price target to 66 from 60.

Data center and automotive sales outgrew Nvidia’s bread-and-butter segment, up 110% and 68% vs. last year, though only comprising 11% and 8% of total sales, respectively. Nvidia sees a $5 billion opportunity in its data center segment, Rakesh said.

RBC analyst Mitch Steves forecasts 20%-30% growth for Nvidia’s data center sales in fiscal 2017. The segment targets hyperscale cloud users like Facebook, Microsoft, Amazon, Baidu (BIDU) and Alibaba (BABA), but 50% of the segment’s sales in fiscal Q2 were for machine-learning.

Lots of opportunity and a little competition in cars…

Nvidia also expanded to 80 carmakers experimenting with its advanced driver-assistance system. The Drive PX 2 fuses radar, lidar and cameras for semi-autonomous driving. But the segment is bound to see some unfettered competition, MKM analyst Ian Ing wrote in a report.

“We note headlines on an autonomous driving partnership between BMW (BMWYY), Mobileye (MBLY) and Intel (INTC); Intel acquiring Nervana and Apple (AAPL) acquiring Turi for deep learning,” he wrote.

Alphabet (GOOGL) and NXP Semiconductors (NXPI) are also working in autonomous driving.

But main GPU rival Advanced Micro Devices (AMD) is “more constrained and resource-challenged,” Ing said.

Take a look at Mobileye also.