The Real Story Behind Nvidia Stock's Earnings: NVDA Stock Analysis

the moments you've been waiting for NVIDIA earnings are out now this is another strong quarter the stock is down it's thrashing around like a ragd out what's going on with Nvidia earnings and where is the stock headed next I've been investing for 25 years and this is the most important earnings report that I've ever experienced some of these headlines Nvidia has become world's most important stock there's no question that the entire Market especially tech stocks were riding on this earn report the implied move is 8% for NVIDIA plus or minus so 8.1% when investors react to earnings reports and this is the 15 largest stocks in the S&P 500 average one day implied impact to the index and you can see Nvidia 54 now it dwarfs everything else on the list so what does that mean exactly it equates to 0.54% move on the S&P 500 so how did Nvidia do reported 122% Revenue growth on surging demand for data centered chips now why is the stock down well expectations are high I'll get to that in a second so right now the stock is down 4% but the earnings call is still going to happen here and we could see more volatility but imagine if Nvidia missed especially if they missed on guidance this stock would have absolutely got hammered so beat on the top and bottom lines and provided stronger than expected guidance for the current quarter net income more than doubl to 16.6 billion or 67 cents per share in the quarter from 6.1 8 billion or 25 cents a share in the year ago period think about those numbers for a second as of closing today Nvidia is up 160% year-to date with a $ 3.09 trillion market cap over the last year it's up 168% before the 4% drop after hours and over the past 5 years up about 2,900 so the data center business which includes AI processors climbed 154% from a year earlier to 26.3 billion that's 88% of nvidia's sales now that beat the estimate of 25.24% billion came from company's networking products now approximately 40% of this Revenue comes from those Mega cap Tech names in capex so Microsoft alphabet meta Tesla used in the vast majority of generative AI applications such as open AIS chat GPT Nvidia also approved a $50 billion share buyback that's not really a big number on a three trillion doll market cap let's dig a little bit deeper here all right so hot off the presses right from nvidia's Newsroom so these are record-breaking numbers again Revenue 30 billion up 15% from q1 and 122% from a year ago so the first thing I heard I had CNBC on in the background well the growth is decelerating yes of course that's going to happen when you're a $3 trillion company you're not going to grow at 200% clip forever we know there's a cycle to this Blackwell's coming data center Revenue though 26.3 billion that's up 16% from q1 that's still a really amazing number and 154% jump from a year ago Hopper demand remains strong and the anticipation for Blackwell is incredible this is jensa Wong CEO Nvidia achieved record revenues as global data centers are in Full Throttle to modernize the entire Computing stack with accelerated Computing and gener of AI these Mega cap tech companies are going Buck Wild on AI and I've heard quotes for example CEO saying that the risk is under investing not overinvestigation the entire breath of the company but it won't come cheap where's that money going to Nvidia Blackwell samples are shipping to our partners and customers Spectrum X ethernet for AI and Nvidia AI enterprise software during the first half of fiscal 2025 Nvidia returned 15.4 billion to shareholders and this is through repurchasing of stock as well as cash dividends so the company still has $7.5 billion remaining and they added $50 billion today it pays a dividend it's not a whole lot 1 cent I like to look at these numbers on Seeking Alpha and you can see it was a Beat by 4 cents and that Revenue 122.4 that beat by $1.31 billion so of course guidance and Outlook very important Revenue expected to be 32.5 billion the consensus was 31.75 billion plus or minus 2% so this is a slight beat on guidance gross margins expectation here 74.4% to 75% for the full year gross margins expected to be in the mid 70% range and I always love to look at these comments cuz they cracked me up you know pretty solid not spectacular but solid I would agree with that I think it's a great earnings report it's just the market expectations are so high we're going to look at a chart later you just see how much this stock is absolutely ripped even from the beginning of August the recent sell off it was down below $100 a share and of course you got Dan here if you loved it at 140 you're going to love it at 70 well I've been long in this since 2017 cost based it's under $4 I'm not really sweating it but if you think it's going to 70 hey more power to you and then of course Alpha with bitte here says that it's a terrible report I can't imagine if the report was actually terrible how bad the stock would syn here's some of the highlights on data center you can take a look for yourself pause the screen I'm not going to read through all this the one thing I did want to point out is this Nvidia AI Foundry service so Nvidia and Global Partners launched Nim agent blueprints for Enterprises to make their own AI so this is a catalog of pre-trained customizable AI workflows that equip millions of Enterprise developers with a full Suite of software for building and deploying generative AI app applications and one of those Partners is another fired up well favorite also reported earnings today beat on top and bottom lines crowd strike aims to secure the future of gen Innovation and collaboration with Nvidia so it's providing additional safeguards for NVIDIA Nim blueprints that's what I just covered with AI native crowd strike platform this helps developers securely leverage open- Source foundational models and accelerate generative AI Innovation so this is built in security to streamline the development process let's start looking at some other things like reasons why the stock can be under pressure one of those reasons comes down to margins now we just talked about margins and this was a slip even though 75.1% is solid it was 78.4% in the prior period now that suggests that pricing power could slowly be eroding it's still good it's hard to really say with a 3.5% difference but it is something to point out and it's still up from 70.1% a year ago I really think this has to do with pricing power discounts things like that of course there's also expenses as well so Taiwan semiconductor maybe they increase their prices on something that could impact these margins in the fourth quarter this is important because the next step the next phase is going to be Blackwell and so we're expecting these companies that are spending billions of dollars on capex to upgrade and other companies to join in in the fourth quarter we expect to ship several billion dollars in Blackwell Revenue this is the CFO Colette Crest however Nvidia said it expected the current generation ship called Hopper to increase total shipments for the next two quarters Hopper demand remains strong and the anticipation for Blackwell is incredible this is NVIDIA CEO Jensen Wong in the press release of course as you know the Gaming revenue used to be the primary focus and I'm going to put an infographic up on your screen I think this is absolutely mind-boggling Gaming revenue did increase 16% from a year ago to 2.9 billion but it it's nothing compared to the data center revenue and that's really the focus for NVIDIA Graphics business Rose 20% reported $454 million in revenue and also 346 million in automotive and Robotics Revenue I think there's a lot of potential future growth in these areas and here are some highlights for gaming as well as professional visualization and then you have automotive and Robotics unveiled the world's leaders and robot development including byd electronics semens and pteridine Robotics they're adopting nvidia's Isaac robotics platform for R&D and production so quick glance of the income statement you can see the numbers and the growth here pretty impressive overall significant in increase in total current assets as well as an uptrend of course in the cash and cash equivalents so where is Nvidia stock headed next if you're new here subscribe to the Channel smash that like button and drop me a comment all right we're going to look at a chart this is a good snapshot too you can take a look at this just to see that income statement where the money's coming from that net profit 16.6 billion you know one of the headlines here this is market watch says Nvidia earnings stock Falls as Revenue Outlook beats but not by enough now again the expectations were Sky High for the stock it's currently down about 6.61% it's $17.31 now one thing you have to remember is the stock literally just went below $100 a share and if we're being honest here the stock is actually less expensive based on the financial metrics it's less expensive right now than it was two years ago but anytime you get to a three trillion dollar market cap expectations are Skyhigh and of course you always say well can they keep this up forever the answer is they can't keep it up forever it's a cycle we think that that cycle is going to last for another year or so but keep in mind here this is on Discord someone post this in the Nvidia DD Channel easy night Jensen in the closing remarks said Nvidia is at the beginning of modernizing $1 trillion of computing infrastructure to put that in perspective they'll be 15% of the way there after this full year Revenue so there could be tremendous opportunity for growth still here in the future and that one year could turn into several years but I've been telling you on the channel the Stock's going to have this this curve where it's going to go up and eventually it's going to come down and find a new floor I think the stock is going to go higher after it consolidates there's a little bit of a gap fill here let me show you the chart all right so first off back in October November 2022 the stock was between $10 and $15 a share now we were saying pound the table bu $125 or less long term now that's before the split so we're talking about $1250 50 cents a share we said on this channel that Nvidia was the must owned stock for every portfolio and a couple years later the stock went from $12.50 to $14.7 this was the top right here and most recently here in the beginning of August August 5th it sold off to $969 I immediately came out with the video and I said it was a buy especially $100 or less as a long-term investment now of course you've been following this channel for a while your cost basis is much lower but I thought that was an opportunity coming down 40 50% from these highs so we were circling these areas saying these are areas to look for if the stock comes lower and these are areas to dollar cost average now the stock is higher than that least it Market close and now it's come back down you can see this blue line $16.9 so it's in the middle of this first Circle right now now we know the downside you know $969 was a recent low the S3 is below $85 at 8496 the 200 day moving average here is about $87 so it's currently below only the 50-day moving average it's still above the 100 day moving average that's that red line it's still above the 200 day moving average and it's still above this S1 which is $15.73 now I can't tell you exactly where it's going to go in here but I do think the stock is going to consolidate there's going to be a digestion period I think the biggest risk right now is if Blackwell is delayed at this point I don't have a ton of clarity making this video trying to get it out to you as soon as I can after earnings but that certainly could take the stock lower and there's definitely a possibility the stock goes back below $100 a share this is going to be extremely volatile especially when there's 3,000% gains over the past 5 years but once the stock consolidates I think the stock will go higher and this R3 is all the way up here at $152.8 now I own 2500 shares and I'm looking to trim 500 shares when it gets Above This $150 Mark I was originally going to do a limit order and I cancel that limit order and I'm waiting I'm eventually going to do cash covered calls and that's how I'm going to sell those 500 shares five Lots I've been saying all year long so the stock started out the beginning of the year is way back here this is January the stock was $58 I told you it was going up to these levels and I said it was going to be $150 or more in 2024 it hasn't gotten there quite yet $140.3 I still believe there's a good chance that this stock is over $150 by the end of this year if it doesn't get there by the end of this year early next year on the upside from there you could see something as as high as 165 and this retracement goes all the way up 209 which is very unlikely anytime soon but I think once this consolidates if the market remains bullish now if the whole Market sells off all bets are off Stock's going to lower if the market remains bullish this will consolidate buyers will come back in and I believe it will be over $150 a share if this video is helpful make sure you subscribe to the Channel smash that like button drop me a comment have a great rest of your day take care