The Market Lives And Dies With Nvidia
The company announced record profits, yet its stock didn't skyrocket as many expected. In fact, it PLUNGED.
PROFITS
Nvidia reported impressive results for the last quarter. Its total revenue reached $39.3 billion, marking a 78.8% year-over-year increase.
The Data Center segment was the biggest revenue driver, bringing in $35.6 billion (+93% YoY), exceeding expectations. However, we saw a slowdown in growth, as the previous quarter's increase was 112%, while last year at this time, it exceeded 400%. Similarly, the Gaming segment saw a 14% decline, while sales of the new Blackwell GPUs reached $11 billion.
Nvidia achieved a 73.5% profit margin and $15.6 billion in free cash flow. In other words? Its financials remain outstanding!
STOCK
Great news! you might say. But why didn’t the stock go up?
Although the numbers were excellent, some investors were concerned about the slower Data Center growth and margin pressures due to the transition from the Hopper to the Blackwell architecture.
Analysts like Joseph Moore from Morgan Stanley called the quarter "transitional", while others, such as Mark Lipacis from Evercore ISI, pointed out that demand for Blackwell GPUs is "better than expected."
Despite these concerns, Nvidia continues to dominate the AI industry. So personally, I don’t see any reason to worry! In fact, this seems like yet another overreaction by the market!
FORECASTS
And if we consider the company's forecasts, things look very optimistic. Specifically, Nvidia expects $43 billion in revenue for the next quarter, exceeding analyst estimates.
The demand for AI chips shows no signs of slowing down, as Nvidia CEO Jensen Huang emphasized:
"The AI era is accelerating at breakneck speed," and "Blackwell will be the most powerful AI chip ever produced."
And many analysts seem to agree, as they continue to predict huge upside potential for the stock! Morgan Stanley raised its price target to $163, while Wedbush Securities believes that Nvidia will reach a $4 trillion market cap by the end of 2025!
So Is Nvidia A good buy opportunity or a correction is incoming ???
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https://www.reddit.com/r/wallstreetbets/comments/1j0z64x/the_market_lives_and_dies_with_nvidia/
https://www.reddit.com/r/wikifolio/comments/1j1lhai/the_market_lives_and_dies_with_nvidia_und_dann/
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My son guessed that one right. Although I don't understand any of it, he is very clever :))
He was right !
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