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Key points Nvidia delivers another earnings beat: Nvidia exceeded expectations with $35.08 billion in revenue, a 94% year-over-year increase, driven by strong performance in its data center business, which more than doubled to $30.8 billion. The company also posted a solid adjusted EPS of $0.81, surpassing the forecast of $0.74. Guidance and Blackwell rollout details underwhelmed: Despite the strong quarter, Nvidia’s Q4 guidance of $37.5 billion, with a possible +/- 2% range, raised some concerns as it could fall short of analyst expectations. Additionally, the rollout of its new Blackwell chips lacked specifics, with the company admitting supply issues that would prevent meeting demand in the near term, which could limit short-term growth potential. Long-term prospects remain: Nvidia continues to be a key player in the booming AI industry, with its GPUs powering 95% of global AI models. The company’s substantial cash reserves of $38.5 billion provide the flexibility to invest in further innovation or increase shareholder returns. While competition and supply risks are present, Nvidia’s position at the center of the AI megatrend makes it well-positioned for long-term growth. Stellar growth meets lofty expectations Nvidia just delivered another standout quarter, significantly beating expectations: Revenue: $35.08 billion (+94% year-on-year), surpassing estimates of $33.25 billion. Adjusted gross margin: Held steady at a robust 75%, as expected. Adjusted EPS: $0.81 per share, beating the estimate of $0.74. Despite these stellar results, the market’s reaction has been muted, highlighting the sky-high expectations for Nvidia. With a market value of $3.6 trillion, Nvidia is the largest chipmaker in the world and accounts for 7% of the S&P 500 index. Its stock trades at 37 times expected earnings, compared to 28 times for AMD and 29 times for Intel, meaning investors are paying a premium for Nvidia’s leadership. This also sets a very high bar…

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Filed under: News - @ November 21, 2024 8:28 am