Top 10 Influencers in 2024Nvidia earnings preview: Remain bullish (Not investment advice)
The main reasons are
1. Outstanding performance; 2. Strong demand for GPUs, with major clients continuing to increase capital expenditures; 3. The index hit a new high, the big brother is back.
1. Outstanding performance.
I've shared the chart below multiple times since April 8 (EPS growth quadrupled), mainly because the growth expectations are very clear.
Analysts expect NVIDIA's total revenue for the first fiscal quarter to be $24.69 billion, up 243.3% year-over-year.
Growth is still accelerating, with last quarter's growth at 205% and the quarter before that at 101%:
EPS is expected to grow 418% year-over-year to $5.65.
The most important data center business revenue is expected to be $21.06 billion, up 391.6% year-over-year.
2. Strong GPU demand, major clients' capital expenditures continue to rise
NVIDIA's client profile is quite typical, with the top five clients accounting for over 60% of revenue. So analyzing the demand and spending of these major clients should suffice.
Several tech giants have already released their Q1 earnings reports:
Meta: Raised its full-year capital expenditure forecast by $10 billion to $35-40 billion (Q1 capex declined sequentially but rose for the full year).
Google: CFO Ruth Porat stated the company will spend about $12 billion or more on capex each quarter this year, mostly on new data centers.
Microsoft: CFO Amy Hood said the company's capex last quarter was $14 billion and expects to continue "substantially" increasing it.
Q1 capex trends for the three major clients:
Goldman Sachs' research report (forecasts for 2024 and 2025):
The massive investments are mainly to seize the AI revolution.
But 2025 growth is expected to slow significantly compared to 2024, so NVIDIA's 2025 revenue growth is projected at 25% (based on previous reports), though it now looks likely to be at least 30%. Jensen Huang might address the growth slowdown in the next quarter or the one after.
3. The index hit a new high, the big brother is back
Previous concerns about April's secondary inflation and geopolitical tensions (especially with the U.S. election in November) were somewhat overblown.
Recent CPI data has dispelled secondary inflation fears, and geopolitical tensions are just... whatever. So the index hit new highs again (Microsoft also hit a new high after last night's event).
Optimism continues, and Q1 13F filings show most major institutions bought big tech stocks.
The difference this time is,
NVIDIA has already hit a closing high, unlike last earnings where it dipped first before surging post-earnings. While bullish this time, we probably won't see another 16% spike.
The main risk is Wall Street's expectations being too high for earnings to meet.
Whether bullish or bearish, I don't recommend leveraging or betting heavily on options for earnings.
This is not investment advice.
Feels like I said a lot, but also like I said nothing.
Suggest asking another StockPro, @六爷漫谈， for a balanced view.
Last quarter's earnings preview:
NVIDIA Earnings Preview: Still Bullish
$NVIDIA(NVDA.US) $NASDAQ Composite Index(.IXIC.US) $S&P 500(.SPX.US)
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