Nvidia Stock Drops After Earnings What Went WRONG? -- NVDA Stock

Nvidia just reported earnings and unfortunately the stock is down roughly 7% on today's episode I want to share My overall thoughts on earnings but I don't want to hold you hostage I want to say I think earnings were great I don't think there's a reason for the selloff and I think as a long-term investor there's nothing to worry about but on today's episode I want to take a closer look at roughly 17 things that I found pretty exciting about nvidia's earnings so let's take a closer look in today's episode I want to thank the mle fool for sponsoring this video and check out full.com hose for the 10 best stocks to buy now with that link you get a promotional offer for the subscription service now let's continue with today's episode all right so if you're new to my channel a few days ago I did an episode where I mentioned 17 key points that I'm going to be looking at during nvidia's earnings and if you want to get it in the written content make sure to check the link on my description for my free substack and on this kind of post I talked about the 17 things that I'm going to keep a closer eye on so now that earnings are released and we had the earnings call I'm going to look at each of the 17 segments that I mentioned and take a closer look at what indyia mentioned all right so the first thing is the Blackwell Saga and the Blackwell Saga for those that are not familiar in the past few months we've heard rumors and discussions that there was going to be a Blackwell DeLay So it seems like maybe there was some truth to it that there were some issues because Nvidia did admit that they changed certain thinks with the Blackwell GPU on the manufacturing side to be able to improve production yields so there seems to have been an error but whatever the error was it's fixed and now that it's fixed we are seeing improvements in production yields which obviously bats well for the company the second thing the company did mention that they expect to get several billion dollars in Blackwell Revenue this year so shipment should be starting in quarter four of this fiscal year so uh kind of an analyst during the Q&A session pretty much wanted to get a reconfirmation even though Nvidia did share all the information and Jensen mentioned that the change to the mask is complete there were no functional changes necessarily and so we're sampling functional samples of Blackwell Grace Blackwell and a variety of system config configurations as we speak so the Blackwell Saga No More Drama we're going to get multi-billion dollars in revenue from this product this year alone and now the second thing was obviously beating Wall Street expectations so for this current quarter we were expected Revenue to be roughly 28.7 billion and earnings per share to be roughly 64 cents Nvidia actually beat both numbers Revenue was 30 billion a 1.3 billion beat which I thought was amazing and diluted earnings per share were 68 cents also beating what the guy what the street was expecting now not only that we were for guidance quarter three analysts were expecting a guidance of $31.6 billion in Revenue Nvidia actually guided for 32.5 billion so overall a double b on both this quarter and guidance again this is why I believe there's no real issue to be worried about Nvidia stock right now before we go any further we are now on the road to 50,000 subscribers by the end of the year thank you all for the crazy support So if you haven't and are enjoying the content make sure to hit the thumbs up and the Subscribe button finally if you want to support the channel a little bit more make sure to check out my special offer at full.com hose now back to today's episode now number three was kind of the Chinese market we've heard reports that the Chinese market was almost non-existent for NVIDIA but there were rumors that uh variant of the Chinese chip was actually doing pretty well in China now unfortunately here we didn't get true commentary or more commentary I we got some commentary I wish we would have gotten a little bit more but Nvidia did mention that their data center Revenue in China grew sequentially in quarter two and is a significant contributor to their data center Revenue but they believe that this data center Revenue will still be much lower than previously had due to export restriction controls and they continue to expect the China Market to be very competitive going forward so at least right now we know that it's non-existent and it did grow sequentially and I'm going to guess this is going to be the case for the upcoming quarter ERS as well now number four is the data center dominance right Nvidia has been doing great in the data center Market but can this continue can the demand for the hopper continue are AI hyperscalers continuing to um updates on this and Jenson mentioned that hey look data center is still a huge market for them right now the world's buil has built about $1 trillion worth of data centers and those $1 trillion worth of data sensors back then did not have any gpus in them just CPUs in the future every single data sensor will have gpus so there's a huge growth opportunity still left over here for the data center Market the other thing is the third um that they expect to grow their Data Center business quite significantly next year Blackwell is going to be a complete game changer for the industry and Blackwell is going to carry into the following year so data center Domin is still going to be pretty high if Nvidia believes and I thought that was pretty bullish they believe that they will expect quite significantly next year those are some big numbers or or or some big um praise to kind of talk about growth potential for next year so right now data center dominance is still here and I believe if we go back a few slides before they did mention that the hopper shipments are expected to increase in the second half of fiscal 2025 so not only are they expected to continue to grow in the data center significant next year but the hopper Market is still pretty pretty strong now the fifth kind of segment was talking about supply and demand dyamic Dynamics Hopper Supply and availabilities have improved demand for blackw platforms is well above Supply and we expect this to continue into next year again everything that I'm watching is still giving me green flags there's nothing from the points that I were was watching that has given me any forms of yellow or red flags and for that reason I believe as a long-term investor I could care less about the after hour stock price um but let me know what are your thoughts so far what have you guys thought was bullish and why do you think the street is not liking this numbers and could this change overnight or tomorrow all right so next number six is the rise of sovereign AI so Sovereign AI is kind of building National AI Solutions and Nvidia mentions that they believe Sovereign AI Revenue will reach low doubl digigit billion dollars this year so we can see that this is a market that has been almost nothing and can grow to very strong numbers this year and we can see that Nvidia has confirmed that it's not always a government entity that will run this Sovereign AI sometimes a government entity will give funding or kind of incentives to other companies and they will kind of purchase in their behalf so it's not necessarily that Canada is purchasing AI Solutions it's that Canada is funding AI Solutions with maybe some other public or private companies now number seven this one was pretty interesting and it was the margins question so they did mention that for the four-year they expect mid 70% its range last quarter and I wanted to make sure that those numbers are still intact for this quarter and Nvidia mentioned that Gap gross margins non-gaap gross margins were 75.7 down sequentially due to a high mix of new data uh data center products which usually tend to have lower margins at the beginning right because when you're ramping up things at the beginning at the lower end of that production ramp you tend to have lower margins now for the upcoming quarter they expect that 75% non-gaap gross margins so pretty much very close to this quarter and for the full year they still expect gross margins to be in the mid 70 percentage range so no changes here and we're still having a nice a nice amount of margins for this company so I believe that was very bullish there another green flag number eight is the automotive market and other markets so we know that Nvidia has seen kind of a multi-billion dollar Revenue opportunity in the auto motor space I wanted to see if there are any other markets that are seeing that growth as well and auto they mentioned this quarter that automo Automotive will drive multi-billion do in Revenue across on Prem and Cloud consumption and will grow as Next Generation AV model mods require significantly more compute they also talk about two other markets Healthcare is also on its way of being a multi-billion Dollar business as AI revolutionizes Medical Imaging surgical robots patient care electric electronic health record processing and Drug Discovery so we can see that the healthcare Market is becoming another big opportunity here for NVIDIA outside of the automotive space now number nine is kind of staying ahead of the pack we know Nvidia has this annual Cadence do they share any talks about the competitive landscape I want to say they don't really they didn't really discuss this much but Jensen did mention the following they mentioned that Nvidia gpus are the only only accelerators on the planet that process and accelerate data in various kind of Data Solutions and Nvidia is the only one that can both accelerate and process this type of information so I mean I think this kind of showcases how Nvidia is still way ahead of the pack um in forms of this solution and their competitive state is still pretty pretty strong also during the earnings call they mentioned that black wall was something that took them 5 years to design because it's such a revolutionary product and I don't think there's any company out there that is catching up anywhere near to Nvidia right now now number 10 to 17 are all pretty small I want to say most of them didn't really give me much room to see any major changes or any red flags the only one I want to talk about are 10 11 and 12 10 and 12 are pretty much the same their gaming segment and the aipc market Nvidia mentions that The Gaming revenue was up 9% sequentially and 16% year-over-year and they see Channel inventories remain healthy the other thing is every PC with an RTX is an aipc so Nvidia is going to continue to dominate The Gaming market and the aipc market now the networking this one is pretty strong so networking Revenue increased 16% sequentially their ethernet for AI Revenue which includes their Spectrum X and an Ethernet platform doubled sequentially with hundreds of customers adopting Spectrum X and they mentioned that Spectrum X is well on track to begin a multi-billion dollar product line within a year so nvidia's networking solution is going to be another growth opportunity here for NVIDIA again I can't really see a reason for the negative price action as a long-term investor I think that Nvidia is still in a very very healthy Trend with the AI space and with the AI market now would I buy at these levels personally me not be I I personally I wouldn't because I already have such a huge position in Nvidia I think for me a small buying opportunity or a decent buying opportunity would be if we get to those August 8th levels of somewhere around the low 100s um 115s isn't bad for smaller dollar cost average in my opinion but it's not one where I would load up the truck those are just my takes let me know what are your thoughts what are your Buy price points and hopefully you enjoyed and learned a lot from this video so make sure to hit the thumbs up and the Subscribe button