The stock popped higher in the after-hour after a magical earning release. Revenue forecasts exceed expectations by a large margin as the surge in demand for chips to power Artificial Intelligence applications helped to fuel its next generation of growth.
Earnings per share and revenue upbeat
The EPS came in at $1.09, easily smashing the expectations of 92 cents. Likewise, revenue hit $7.2 billion, well above the guidance of $6.5 billion. While we see a moderation in gaming revenue, a 28% drop from a year ago, its data centre business jumped 14%, attributed to the AI momentum too.
Outlook generates huge FOMO
The highlight was the outlook. It gave a revenue forecast of $11 billion, which is way above analysts’ $7.2 billion forecast. That’s a mega beat. As the CEO mentioned, the computer industry is shifting towards ” accelerated computing and generative AI”, which are the key pillars of Nvidia’s business involvement.
A clear leader in the AI Era
There’s little doubt that Nvidia will be a big beneficiary of this new world of chips demand. Its product is widely used in video games, AI and cloud computing applications, and server hardware.
With its high visibility and exposure in the generative AI segment, it faces surging demand for its product. Most of their business growth would come from generative AI projects such as cloud computing providers, mega internet corporations, and the new startups and enterprises crowding into the space.
Its main suppliers have a large supply commitment to help deliver this extraordinary generation growth.
What’s on the menu today?
- 8.30 pm : GDP (QoQ), Initial Jobless Claims.
- 10 pm : Pending Home Sales
It is 25 May , Thursday, 9 am in Singapore and 9 pm in New York. We are still trapped in S&P 500 positions, and most hopefully, we can offload all our Nasdaq positions (wasted as I sold call before the Nvidia moon, but that is hindsight).
Do keep positions light as we have another inflation data on Friday.
Have a splendid day, friends and do take breakfast as you begin your work and school days!
From your lovely trading buddy,
Pika Nat
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