NOT TOO LATE! I'm Buying Nvidia Stock (NVDA) After Earnings!

Summary

Nvidia's recent earnings call was pivotal, reflecting the company's role as a key driver in the AI revolution. The company reported record revenues of $30 billion, with a significant 88% coming from data centers, indicating a 154% year-over-year growth. Nvidia's new Blackwell AI chip, set to enter production in Q4, promises a substantial leap in performance, potentially accelerating the AI gold rush. Despite a temporary 3-month delay due to manufacturing challenges, the company is on track to meet demand. Nvidia's dominance in the data center GPU market, coupled with its innovative ecosystem, positions it favorably for future growth, despite competition from both chipmakers and cloud providers developing their own AI accelerators.

Takeaways

• 📈 Nvidia's recent earnings call was pivotal, with its results influencing the trajectory of the AI Revolution.
• 🌟 The term 'Magnificent 7' refers to companies like Amazon, Meta, and Tesla that are heavily investing in AI, driving market returns.
• 💰 Nvidia's revenue and earnings per share (EPS) exceeded expectations, with a significant year-over-year growth, indicating strong market performance.
• 🚀 Nvidia's data center business is booming, with revenues skyrocketing 154% year-over-year, underscoring the demand for AI infrastructure.
• 🏆 Nvidia dominates the data center GPU market with over 90% share, solidifying its position as a key player in AI technology.
• 🆕 The upcoming Blackwell AI chip from Nvidia is expected to revolutionize AI processing, offering大幅提升 in performance.
• 🛠️ Production delays for Blackwell were due to manufacturing challenges, not design flaws, with Nvidia addressing these to improve yields.
• 💡 Nvidia's focus on direct-to-chip liquid cooling with Blackwell signifies a significant shift in data center cooling technology.
• 📉 Despite strong earnings, Nvidia's stock price dropped due to a dip in gross margins, which was tied to the production challenges of Blackwell.
• 🔮 Looking ahead, Nvidia's continued innovation, including Blackwell and other upcoming technologies, positions it well for future growth in the AI sector.

Q & A

Why was Nvidia's recent earnings call considered one of the most important?

Nvidia's earnings call was considered one of the most important because it's not just about revenues and profit margins; it decides the speed and scale of the entire AI Revolution. Nvidia's performance is seen as a barometer for the investment in AI infrastructure by other companies.

What is the significance of the 'Magnificent 7' in the context of the AI Revolution?

The 'Magnificent 7' refers to companies like Amazon, Meta Platforms, and Tesla that have significant data center infrastructures, global products and services benefiting from AI, and deep pockets to invest aggressively in AI. Their performance largely drives the stock market returns related to AI.

How does Nvidia's position as a supplier of AI chips affect its importance in the market?

Nvidia's position as a supplier of AI chips is crucial because it means they are at the forefront of the 'AI Gold Rush.' Being the company that sells the essential tools ('picks and shovels') for AI development, Nvidia's revenue growth can indicate the pace of AI infrastructure investment by other companies.

What is Blackwell and why is it significant for Nvidia's future?

Blackwell is Nvidia's next-generation AI chip, which is expected to be a primary driver in the AI Gold Rush. It is designed to perform significantly better than its predecessor, Hopper, in AI training and inference tasks. The speed and scale of Blackwell's deployment in data centers will largely determine the progress of the AI Revolution.

How did Nvidia's financial performance in the reported quarter reflect the company's success?

Nvidia posted record revenues of $30 billion for the quarter, a 15% increase quarter over quarter and a 122% increase year-over-year. They also reported earnings per share of $6.8, which is 171% higher than a year ago, showcasing their strong financial performance.

What is the role of direct-to-chip liquid cooling in the adoption of Blackwell chips?

Direct-to-chip liquid cooling is significant for Blackwell chips as it allows for more efficient cooling, which is necessary for the high-performance demands of these chips. This technology is expected to become the standard for cooling in data centers, facilitating the adoption of Blackwell chips.

What are the risks Nvidia faces in terms of competition and supply constraints?

While Nvidia faces competition from chipmakers like Intel and AMD, and hyperscalers that make their own accelerators, these competitors do not directly compete with Nvidia's market share in GPUs. The real risks are complexity in their ecosystem and supply constraints, which Nvidia is addressing by working closely with partners like TSMC.

How did the delay in Blackwell's production affect Nvidia's gross margins?

The delay in Blackwell's production due to accuracy limitations in the manufacturing process led to lower yields, which in turn affected Nvidia's gross margins. Despite this, Nvidia managed to maintain high margins at 75.1%, showing their ability to adapt and address production issues.

What is the significance of Nvidia's share repurchase program for investors?

Nvidia's share repurchase program, with an additional $50 billion approved, is significant for investors as it shows the company's confidence in its long-term growth. Share buybacks can increase the value of outstanding shares and demonstrate a commitment to enhancing shareholder value.

What are Nvidia's plans for the long term in terms of product development?

Nvidia has a robust long-term product development plan, including the launch of Blackwell Ultra chips in 2025, followed by the Reuben architecture in 2026, and Reuben Ultras in 2027. These products are designed to be architecturally compatible, ensuring a smooth transition and continued investment in Nvidia's ecosystem.