Understanding Nvidia’s Stock Decline: Market Implications | Nvidia Stock | NVDA Stock | NVDA

you actually have been in Asia a lot and you've been looking at the factories and you've been talking to people who are the end buyers of some of these chips and the producers to understand exactly how much demand there is what have you seen that gives you such confidence that this really is a takeoff story even now with some questions about how long uh the Magnificent three or four uh Us big tech companies can continue to support it yeah we'll be going back to Asia on next week a trillion dollars of cap backs is what we see from an AI perspective over the next three years you go back 6 months ago we thought that was 500 billion and so every quarter if you look at the underlying demand not just some hyperscalers but what eventually what's going to be other Enterprises it's just starting so all of our checks are showing demands actually continuing to accelerate you know as far about yields are improving from production perspective that they're the only game in town use cases are coming through we saw that with paler you see that with service now now this fourth Industrial Revolution Rome wasn't built in a day neither will AI Revolution it's starting to come together anyone that thinks this is hype you listen to conference calls Nvidia AMD Microsoft paler and others I mean I don't know what watch party those bears are but but not they're not listening to the calls that I am you say it's LeBron at high school why isn't it's AR Williamson why could we end up with a situation when we actually get real competition and it just doesn't do that well anymore how big is this moat around this company yeah and and I think it's a great question I right now only game in town AMD and obviously Lisa Sue and others are going to benefit the reason this is a LeBron in high school is because they are so ahead of any other competitor and right now they're the only game in town the new gold the new oil it's AMD chips and when you come away from that conference call last night I I get after hours and and bears will come out but there's nothing that makes me think that we don't have a year from now or less you have three4 trillion Mark caps Godfather of AI and Nvidia what's happening in copertina with the AI super cycle starting off on on iPhone 16 and what's happening with Delan Redmond you actually have been in Asia a lot and you've been looking at the factories and you've been talking to people who are the end buyers of some of these chips and the producers to understand exactly how much demand there is what have you seen that gives you such confidence that this really is a takeoff story even now with some questions about how long uh the Magnificent three or four uh Us big tech companies can continue to support it yeah we'll be going back to Asia on next week a trillion dollars of cap backs is what we see from an AI perspective over the next three years you go back 6 months ago we thought that was 500 billion and so every quarter if you look at the underlying demand not just from hyperscalers but eventually it's going to be other Enterprises it's just starting so all of our our checks are showing demands actually continuing to accelerate you know as far talk about yields are improving from production perspective that they're the only game in town use cases are coming through we saw that with paler you see that with service now now this fourth Industrial Revolution Rome wasn't built in a day neither will AI Revolution it's starting to come together anyone that thinks this is hype you listen to conference calls Nvidia AMD Microsoft paler and others I mean I don't know what watch party those bears are but but they're not listening to the calls that I am you say it's LeBron at high school why isn't it Z Williamson why could we end up with a situation when we actually get real competition and it just doesn't do that well anymore how big is this moat around this company yeah and and I think it's a great question I right now only game in town AMD and obviously Lisa Su and others are going to benefit the reason this is a LeBron in high school is because they are so ahead of any other competitor and right now they're the only game in town the new gold the new oil it's AMD chips and when you come away from that conference call last night I get after hours and and bears will come out but there's nothing that makes me think that we don't have a year from now or less you have three4 trillion Mark caps Godfather of AI and Nvidia what's happening in certina with the AI super cycle starting off on on iPhone 16 and what's happening with Delan Redmond people focused in on the gross margin and that they guided to a second half of the year uh gross margin of 75% whereas uh they previously came in in the last quarter at around 78% um I think it's entirely due to the to the the the development uh and the production of the black W chip which is obviously understandable but um Street has a high bar I think I think we'll have to see though how the stock actually opens and trades tomorrow in the US because it reminds me of the case where Apple stock was down the day of the uh of the WWDC a few months ago in June and then people thought it was a big disappointment what's what's so special about Apple intelligence and then suddenly the next day and and for a couple of days after that the stock rallied 10% I think the same thing could happen here with Nvidia yeah and of course after the call uh jensten Hong actually speaking in an interview saying next year will be great Supply will continue to improve each quarter so do you see this uh dip after hours price action as a buying opportunity I do I I think uh I think he seemed genuinely surprised that um you know the stock seemed to sell off after hours or some of the some of the folks interviewing him after the earnings call um seemed to be pressing him when he was pointing to the fact that uh there were you know it's a good thing um that the the Blackwell delays were not as serious as were feared in some of the press reports a few weeks ago uh he he spoke to the fact that that they would be producing and shipping in the fourth their fourth quarter um these chips and they would it would be producing and adding billions of dollars in nvidia's fourth quarter um and there were other signs uh in in their businesses uh the things were going well software uh continues to be very important part of their story working is a very important part of their story all healthy signs so I do think it it is a buying opportunity on this initial dip um you know in the after hours in other recent developments current analyst reports state that Nvidia Corporation has been performing financially better than anticipated wolf research continued to rate Nvidia as an outperform after the firm posted better than expected Financial results the company also unveiled nvidia's Blackwell GPU changes which are anticipating to start in the fourth fiscal quarter and bring in a substantial amount of money these changes are intended to increase production yield nvidia's strong fundamentals and the possible Revenue Boost from the Blackwell product were highlighted by Piper Sandler who reiterated its overweight rating despite some yield and production problems in light of the strong demand for the Blackwell product and the company's projected expansion particularly in the data center industry Bernstein raised its price estimate on video shares according to recent comments by colet cres the company's CFO the adoption of AI applications by nations may boost nvidia's Revenue by low double digigit billions for the fiscal year that ends in January 2025 this coincides with a rise in demand for NVIDIA chips as countries invest more in AI models customized to their languages in light of data's quantitative perspective on vidia's Financial Health and Market position bace securities optimism regarding the company's future makes sense with a market valuation of $3,090 billion Nvidia is wellestablished in the business the company trades at a big earnings multiple which is consistent with B's valuation research and indicates that investors have high expectations for future profits growth its P/E ratio is 72.8 moreover Nvidia has grown its sales at an astounding rate of 28.2 7% over the past 12 months demonstrating its capacity to grow its Top Line rapidly the advantages and areas of interest for investors in Nvidia with a Flawless pyot trosy score of Nine the organization has excellent Financial Health analysts anticipate that Nvidia will maintain its sales rise in the current year which supports B A Security's optimistic view Wall Street analysts are encouraging investors to buy the latest pullback Nvidia shares the widely popular AI company's quarterly earnings on Wednesday didn't live up to the high hopes of investors who have driven a sharp increase in the company's stock by placing significant bets on the development of generative a in Thursday's pre-market trading the chipmaker shares dropped by almost 3% which also hurt other chip stocks even with notable profit and expansion the outcomes were viewed as mediocre nvida Corporation exceeded analyst projections for adjusted earnings per share in sales of $28.6 billion by posting adjusted earnings of $0 and 68 cents per share on $3.4 billion for the quarter that ended on July 28 the impressive outcomes were driven by a 154% rise in data center Revenue which reached $ 26.27 billion over the previous year Nvidia stated that it anticipates $32.5 billion in revenue for Q3 plus or minus 2% which is more above wall Street's $ 31.9 billion projection it also projects several billions in Blackwell Revenue in key4 so what does this really mean for nidia's stock let's find out but first if you made it this far into the video thank you these videos take a lot of effort and time to make so if you enjoyed them please hit the like button subscribe to the channel this goes a long way in helping us grow that said back to the video tell me if if you think that the impact that Nvidia has on the broader markets makes good sense yeah good morning contesta look it it does in some respects you know if if we were just talking about Nvidia the stock it wouldn't make much sense at all but that's not really the story here the story with Nvidia is isn't really just you know nvda the ticker and what it's doing on any particular day the story with Nvidia is is more about like how much of the economy is adopting AI how much of the economy um is cback spending on these things and what we saw at the earnings report was actually really really good on that on that front you know what we saw is a broadening out of the types of companies you know cack spending on AI and if you're going to get the productivity enhancement boom that we think you're going to get out of out of this revolution then you need a a broad SWA of the economy investing in capex and AI actually implementing it and figuring out how to use it to to to generate those productivity booms I you know it's interesting because you're pointing out that that Revenue per worker is the metric to look at that that when we're looking at adoption of AI Revenue per worker is what has the potential to move the economy forward explain that thesis yeah look um productivity for you know productivity itself is really tough to to uh to measure to to start to start with so let's let's just start there and and admit that productivity is hard to measure but one way you can measure it is is revenue per worker I mean that that is kind of what the definition of it is um and the last time we saw a big uptick in productivity per worker in the SP 500 names was really back in in the mid90s um and and that and that obviously coincided with the internet NPC revolutions we've been stagnant for the most part for 20 years on that metric and if you get a big uptick we've we've started see an uptick these last couple years in that metric if you up you start seeing an uptick in that type of measure man look out you know look out above in terms of the stock market that you know that kind of that kind of productivity that we have not seen for 20 years would be really really welcome Nvidia has projected non-gaap gross margins to reach 75% which is in line with analyst estimates gross margins are predicted to remain in the mid 70% range for the entire year with somewhat lower margins in key4 than the over 75% realized in fp3 analysts continued to be upbeat about nvidia's stock even if the company's sales and gross margin projections fell short of wall Street's expectations this quarter more specifically UBS analysts advise investors to purchase the retreat because important nvda indicators remain bullish the increase in nvidia's Supply and purchase agreements was specifically emphasized by UBS who noted that this is the most significant indicator we follow and a sign of future growth the 10 billion rise in what we believe to be the prince total Supply experts noted was perhaps the most encouraging indication of the print this was up 40% q/q following a significant slowdown in growth over the previous few quarters and it was up just 15% in the most recent quarter following a flat fourth quarter the banks analysts added that they don't worry about gross margin and anticipate data center margins to be roughly stable during the Blackwell cycle comparable to What was seen during the hopper cycle similarly following the release Bank of America analysts maintained their buy recommendation on viia stock and increased their Target price from $150 to $165 bof said that increasing black well ramp costs could have an impact on Q3 margins and advised that the stock is expected to be volatile in the immediate term due to certain of Invidia estimates falling short of lofty expectations nevertheless experts emphasized that despite the commotion they still think highly of nvda distinct growth potential execution and overwhelming 80% plus market share because generative AI installations are still in the first 1 to 1.5 years of an upfront investment cycle that lasts at least 3 to 4 years for Global cloud and corporate customers deploying AI remains a mission critical requirement and nvda offers the finest TurnKey option they continued the bank also noted Invidia is appealing pricing with a price to earnings PE ratio of 30 to 35 times predicted Cy 25 profits or a p ratio of less than one relative to the expected EPS growth of over 40 % the bof team stressed that this is exceptional not only in semis but also in large cap Tech and growth