Nvidia (NVDA) Earnings Deep Dive: Everything YOU Need to Know!

yo what's going on guys welcome back to finessing finance 101 it's Stephen here back with another video and as you guys might know Nvidia just posted their earnings report so in this video we're going to go through everything that you guys need to know what the results will look like we're going to look at the chart see what they're performing like after this report just came out and I'm going to talk to you guys about what I'm doing with Nvidia as well now also make sure you stay tuned to the end because I am going to tune into to the the earnings call and uh talk about everything that they talk about on there and give you guys a good little summary of that so if you guys appreciate me staying on you know after hours and pushing this video out to you as soon as possible please consider subscribing it really helps me out hit that like button down below and share this video with anyone you think will find it helpful so let's get right into it so first let's get right into the report and show you guys what they reported here uh we can see some of the headline items record quarterly revenue of 30 billion up 15% from q1 and up 122% from a year ago great numbers uh another headline item year is record quarterly data center revenue of 26.3 billion that's up 16% from q1 and up 154% from a year ago so that's a huge increase and you guys obviously know what has happened with Nvidia they've had a crazy run and this is reflected in these numbers um some of the other things that they mentioned here uh they talked about of course their revenue the the hopper Demand right here so Hopper demand remains strong and the anticipation of Blackwell is incredible said Jensen Wang so Nvidia achieved record revenues as global data centers are in Full Throttle to modernize the Entire Computer stack with accelerated computer Computing and generative AI of course everything is about AI right now so they've had some other things here as well they've had uh black wall samples started to ship to their Partners um they also have Spectrum X ethernet which is the ethernet for AI as they like to call it a couple other things here too but one thing I really want to point out is um right here so the board of directors approved an additional 50 billion in Sher purchase authorization without expiration that is on top of the already 75 billion remaining under their previous share repurchase authorization which is a big share buyback as well so that's good for shareholders and it'll be a good return of capital to them so uh they also confirm that they will be paying their dividend of course uh they also mentioned here that they have completed their cal1 stock split as we all know uh and so these numbers are going to reflect that now moving on to some of the basic items here their revenue was reported to be 30 billion uh which is good quite an increase over the previous quarter of 26 billion uh that is up 15% quarter over quarter and up 122% year-over-year so that is really good uh I'd like to see that now net income here is another thing that I like to look look at that came out to 16.5 billion almost 6 billion uh in comparison to 14881 um so that is another good beat there or increase there quarter over quarter and year over-year last Q2 was at 6 billion and now it's at 16 billion so that's a huge increase of course that is up 168% which is absolutely insane quarter of quarter was up a little bit less 12% which still really good um now diluted earnings per share will reflect basically the same thing and a share based metric so 67 cents a share earnings compared to 60 cents last quarter um and of course last year 25 cents a share so year-over year up 168% up 12% quarter over quarter really good there uh no complaints from me I really like to see that for my Holdings so that those are great numbers can't complain um I do want to go down down really quickly here to the um to the balance sheet so let's take a look uh current assets are up a bit here 59 billion comparison to 44.3 billion uh huge increase there uh total liabilities let's take a look here so 13.9 almost 14 billion comparison to uh 10.6 uh so a bit of an increase on liabilities but the important thing for me is the shareholder equity of course as you guys might know I'm pretty big on this uh 58 billion in comparison to 42.9 billion so continually to continuing to increase shareholder Equity that's good for me I definitely like to see that now I do want to take a look here let's take a look at the cash flows uh so there cash flows from operating activity yep so all good here basically net income but what I do want to see is a free cash flow if we can find it here uh sometimes they list it sometimes they don't so let's take a look oh here I missed it so here we can see free cash flow um is at 13.4 uh last so last quarter was at 14.9 that is a little bit less slight reduction in the cash flow so that might be one thing that it's uh investors are looking at as this trade down and um that that could be that could be one of the reasons now I'm not really concerned about this if you look at this year-over-year uh so far this this fiscal year is at 28 billion versus 8 billion last fiscal year at this point so that that's fine with me uh this looks good I'm not too concerned with a a slight dip in free cash flow um and you can see that they did have slightly more expenses related to property and equipment and intangible assets of 9 977 million in comparison to 369 million uh last quarter so that could be some of the difference there um let's see so yeah that's pretty much the results uh those are the main things that I look at now let's take a look and see how it's trading after hours we can see it's trading at around this actually not update let me go ahead and refresh the page here um it's not showing the actual price right now that it's trading at 21 on my thinker swim but um it is trading down a bit after hours so here let's take a look at it on here maybe we can get this so we see here it's at around 3.2% down and after hours um which is not a whole lot it's really not that bad the implied move was supposed to be around 10% or so and that's quite a bit less I was actually surprised when I first saw saw it um saw the earnings come out that it didn't move as much as I expected but you know that's okay sometimes these things move like crazy sometimes they don't Nvidia has had quite a few beats so a lot of things are already kind of priced into the future expectations of this company now um in terms of historical I do want to take a quick look just so we can you know be clear about what where this company has come from and where it is now um if you look at this Revenue chart uh this is a huge huge increase in the past 1 2 3 four quarters uh at around $80 billion um so that's that's pretty that's pretty good um quarter quarter over quarter so 22 billion last quarter 26 billion uh the most recent quarter and of course now we know that is a bit higher um this is historical so this doesn't include the most current earnings that we just saw so keep that in mind that this is not including the report that we just looked at but just to get a sense of how um how crazy this you know the growth has been in this company this is net income here they went in from just a couple of quarters ago from 10 billion to 42 billion and if we go back to the document and look at the net income let me check right here net income is now at uh here let's see 16 on this quarter 16 billion so if we go back uh we can see it was 14 last quarter of course that's also reflected here whoops wrong one uh 15 right here so anyways uh just kind of wanted to show that um and of course Nvidia is starting to buy back their shares though that is good I like to see this chart share count going down that's good for me uh another thing of course is shareholder Equity that I like to look at and it has absolutely just exploded so really I have no problems with Nvidia I still am holding my position I do plan to sell some of it uh but it hasn't quite reached my Target yet to sell some of the position um but yeah I intend to you know be patient with this one I don't have any concerns right now as to the Future direction of it they're still growing incredibly fast there's a lot of demand for these AI chips and they are innovating quite quickly and improving their products very fast at a very fast pace so I'm not really too concerned with that now yeah as I said uh I plan on holding my position for the time being I do have a very low average price I haven't added in quite some time I've been holding Nvidia for a very long time now um and so i' I've been lucky enough to kind of be part of this parabolic move that it's had over the past uh say year and a half or so um so yeah I'm not really in a rush to sell out of it uh some people are selling out of it now it's trading down a little bit back down to around 120 I think or something I'm here let me go ahead and see if I can pull this up for you guys and so this here is a little bit more updated it's tick by tick so um you can see right now it's trading at around 120 um and it initially traded down uh quite a bit to around 115 uh when the report first came out it was kind of flat actually it was a little bit weird a little bit up a little bit down around in this range um so you know it that was a little bit weird that it didn't move right away uh but then it started to move down a bit and so I'm assuming this has to be something to do with the free cash flow um but yeah if we zoom out a bit here let's see where we're kind of we kind of have some 4H hour support around here here or so uh let's take a look at this on a higher time frame though I don't like to draw zones on a time frame that small uh really we have a really far support all the way down here on the weekly uh some resistance up here as it hasn't wanted to break through this 140 level uh but nothing really clear on the weekly chart at least uh between that range so that's quite a big range that it could trade in let's take a look at the daily chart see if we can find something maybe a little bit closer so it does look like we might actually have some potential support around here around here or so somewhere in this range could have some support um so we'll see if that that kind of holds on The Daily uh again I'm not really too concerned I see it trading between uh 140 and 100 maybe for a little while uh but you know we we'll see what happens these earnings reports are a bit tricky sometimes uh people overreact to certain things and you know you can never really know what uh what the reaction is going to be like but I'm do I do see some a little bit of support here on the daily so we'll see what happens um and we'll see where nid goes uh my target is a bit higher than the 140 High we have seen previously do believe it was actually a little bit higher than 140 yet but so in after hours it reached 14109 uh my first initial sell Target is a bit higher than that I'm not going to say exactly where but uh I am expecting this to go higher than than 140 at some point and so I'll be patient with it uh and I I'll keep holding my shares for the time being and we'll see what happens now make sure you stay tuned uh I am going to tune in to the earnings call and see if they have anything else to say or if there's some good questions that are asked some additional insights that uh we might not have seen from the results usually is so make sure you stay tuned I'm going to talk about what they talked about on the call after I listened to it uh it's starting here in a few minutes so I'll be back when when that's over all right guys so they just finished up this call here um and there was a lot of interesting things they talked about some of which they have talked about before um first I'm going to talk about uh you know uh everything that they said and then I'll move into the question s but um a lot of the focus was basically around uh that we need more compute power we need a lot more compute power to continue to advance our systems our technology our infrastructure uh companies are really in need of this technology and this Hardware um and so the the trend is showing that it's going to continue to be that way for a long time uh that we are just like now getting into upgrading our systems to be able to power AI Automotive uh autonomous you know Vehicles robotics all this stuff all these industries that are now moving into uh basically machine learning and generative uh Computing um not sure if that was the term but um accelerated Computing I mean uh so they're they're moving into that kind of thing uh you know and industries such as like like I said AI automotive technology and Healthcare and a lot more that there's thousands of companies that have the demand for NVIDIA chips and it does not seem to be slowing down um now the h200 they did mention briefly that it's a huge leap in performance compared to the h100 and these are the hopper series chips um and the the h200 actually began ramping up in Q2 um and that's their current chip their next one will be Blackwell which is even a a bigger leap than the h200 um but there's a lot of demand already as it is for the h200 um and so you know they also briefly talked about some of the competition in China how it's strong and it will continue to be strong um and you know Nvidia is prepared for that uh and they're seeing that uh they do still think that they have the best product um and the best chips which they currently do and they're very far ahead of the competition so another thing is that they're moving into a little bit more into networking um especially with the Blackwell series chips and stacks uh they're moving into you know increasing the speed of networking and reducing latency and stuff like that especially with their um their ethernet platform so that's one of the things they did mention there um they do expect the shipments to increase for the Blackwell systems uh in 2025 and it would actually the Jensen actually mentioned that it's going to start shipping out in Q4 2024 uh which is actually their Q5 their 2025 Q4 but um that that'll be later later this year basically they're going to start shipping them out um and that demand is well above Supply at the moment so there is still a lot of demand despite that chip not even being out yet uh they are doing tests with you know shipping out some samples and stuff like that to certain Partners um which I mentioned before um now another thing is the Spectrum x uh Spectrum X has 1.6 times of performance as ethernet traditional ethernet and the adoption is very strong and this will be part of the Blackwell series chips um this is kind of like their leap into networking um and that's something that they actually talked about in the end which I'll get back to um now the use cases of course chatbots co-pilots agents uh enhance employee productivity transform customer service uh Automotive is another key driver basically all automakers are using Nvidia right now for autonomous driving and programming their autonomous vehicles now another really strong growing industry is Healthcare it's becoming a multi-billion Dollar business um and as you know advanc it's helping to advance Healthcare Solutions um it's basically aiding drug Discovery this is computer aided drug discovery which is you know a huge Advantage being able to try millions of drugs in a microc versus you know our traditional ways of doing it manually uh or different formulas and stuff like that so that that could be a huge advancement in you know our our healthare um and so that's another huge industry that's growing very quickly and has a lot of demand for these Nvidia chips now another thing they spoke about is the NIMS uh these are agents uh basically Blueprints and and they're available available through Nvidia software this is something that I've previously talked about before that Nvidia is actually going into software as a service a lot more and I think that the future is in software as a service for NVIDIA uh because they can only sell so many chips and so that's actually something that they're leaning more and more into and they're saying that it's growing a lot quicker than uh they previously expected and so uh it it it's set to reach a$2 billion run rate this year um and you know I I made a previous video that Nvidia needs to transition to software the service they can't always sell chips uh it's kind of like a apple situation where uh Apple used to sell iPhones and that was their big money maker and then they started you know teasing these little Services here and there to get recurring Revenue in Nidia needs that recurring Revenue they can't sell chips forever eventually these chips are going to get so good and the leaps and performance are going to get too small to make it worth upgrading your entire infrastructure your entire data center so they have to rely on some kind of software as a service and you know it reaching a $2 billion run rate this year is uh pretty good um because they're just on the cusp of run you know transitioning from Hardware to software type business so that's super interesting and super exciting now there's still a lot of demand for gaming uh of course it's only a fraction of their total revenue uh it it's become a lot smaller especially as data centers have picked up and so but they did mention there's still a lot of demand for it and their RTX chips and there's still the pref preferred platform with a bunch of devices integrating RTX chips even laptops and stuff like that uh and so gaming is still a big thing that's where the roots of Nvidia really come from so there's still it's still a strong component of the company um now Omniverse Cloud so so there are a bunch of companies a lot of companies that are signing contracts to use it in their factories and this is part of the the software as a service type of thing that I was talking about too this is one of their software-based businesses and so Omniverse is basically uh a a modeling software type of thing where where it runs in you know that they'll lease it out um they run it in a cloud and it can run simulations of factories and warehouses to create the most efficient layouts the most efficient routes um and so basically it'll uh it'll test you know hundreds of different layouts and different um just basically layouts for for warehouses and stuff like that and so uh companies can use this to find the best way to lay out their factories and you know automate their manufacturing processes and so that's a a big component for you know software as a service and a lot of companies are signing contracts to use Omniverse cloud and so that's pretty good too now of course we know Nvidia has so many Partnerships so many companies are using the Nvidia chips uh Amazon you know meta uh Microsoft um you know Tesla there's a bunch of huge companies that are using these chips and they're relying on these chips and so Nvidia is still growing really fast really quickly um a lot of competitors got caught with their pants down basically um and NV video was so ahead of the curve that everybody knows that Nvidia is the go-to product because it's the best product and that still hasn't changed this quarter um now Q3 expectations they briefly touched on this total revenue is expected to be around 32.5 billion give or take I believe they said 2% um and so that's still an increase over this quarter pretty good uh gross margin should be in the mid 70% range uh also very good now I do want to move into the questions some of the the questions that they asked that that I found interesting um now they they confirmed that Blackwell will start to ship out in Q4 um and it's already you know going under production I'm pretty sure actually they said uh it would start production Q4 and also ship out in Q4 if I'm not mistaken um but yeah so basically it's it's for sure going to be shipping out in Q4 uh there was a lot of concerns about the delays and stuff like that that there was rumors about it being delayed uh but it will be shipping out in Q4 now another uh question came from you know how how are they gauging the customers their customers returns uh when they you know purchase these chips and stuff like that um and so uh basically Jensen said that accelerated Computing is driving the returns because of the efficiency and the speed there's huge power savings and lower cost when you use Nvidia chips and it's giving you a lot more efficiency and productivity so you're you're saving a lot of costs and you know you these companies are seeing the benefits of the scaling uh quickly scaling and being able to you know just Advance their processes and their infrastructure uh and you you know just Improvement becomes exponential when you start to use Ai and machine learning and uh you know Advanced Computing stuff like that so that was one of those the questions and um somebody also asked about the improved Outlook uh and what's kind of driving that so some of the points where Enterprise AI uh companies are wanting to improve their systems efficiency productivity uh robotics is also driving that and other Industries which are significantly betting uh benefiting from AI as well uh another thing was the demand for Hopper to Black well so basically the question was revolving around you know why is there still so much demand for Hopper when black R is right around the corner um and the fact is that the demand for Hopper is very strong right now even without Blackwell um and the transition process you know it's it's going to be it it's going to be basically that companies have to rely on Hopper right now uh because it's the only way to get good performance right now and if they don't and if they wait around for Blackwell they're going to fall behind um so there's a lack of data processing power and Nvidia is the only one to get really really good performance um and so you know the the return on this is basically immediate is what they were saying um now another note I have here uh rentals so companies are actually renting to startups for processing power these companies need it now so they really can't wait for the next version of Blackwell and that's why uh there's a lot of Hopper Demand right now um and also they briefly touched on the race to the next Plateau which companies want to be the first to get to the next level so the hopper chips are necessary for companies to buy now because um they will continue to push towards the next level of of AI and if they wait you know between now and Blackwell there's a ton of time so they need Hopper now they can't wait on blackw come out they need to get these ships now so that they can continue to advance and be the first to the next level of AI uh and Computing yeah you know so uh basically when deciding you know between developing a CPU infrastructure or GPU infrastructure that's a no-brainer no-brainer um you're going to go GPU because of the huge benefits we've seen recently um now another question was revolved around return on investment Roi and capex um so the time frame for Roi somebody was asking about you know when when does that happen uh and people investing in inidia infrastructure is you know they're getting their Roi right away uh you can monetize it either way either by using it or leasing it and the cost savings are so huge that uh you know you save a lot of money on energy first of all but you're also just being more productive and efficient which is great um and so you save money basically right away um and that that's why the ROI happens immediately and so it's the best infrastructure you can use today the world is moving towards you know generative Computing and Ai and machine learning and so uh Nvidia is the best to do it right now now another question was revolved around the need for liquid cooling and the adaptation of that now they do sell multiple versions of their chips uh liquid cooling they did mention is better and cheaper and allows for NV link too which is a huge Advantage um but basically uh that that adaptation will be will be fine um it it probably makes more sense to go liquid cooling is what I would say um but you know we'll have to wait and see anyway so other risks you know there's other risks to in terms of power supply and you know energy generation or current infrastructure what if it's not enough to handle all of these data centers that that are being built and all the infrastructure that's being built around these data centers um is are we you know going to be able to power these things so uh that was a good question I thought um and Jensen mentioned about how the development of you know our infrastructure will be very different um moving forward than it has been in the past it's going to be built around supporting these systems and stuff like that and so um you know you have to consider the efficiency too uh you you waste less energy when you're working more efficiently so more things can get done in a less amount of time now now my thoughts on this is that ly people will spend more time on developing the things we need uh because you know Ai and and you know machine learning and you know Advanced Computing is going to save us a lot of time on a lot of other things so what else are we going to do right I think inevitably there's going to be money to be made in power generation and making power generation more efficient uh and getting cleaner energy sources so I think that'll come naturally as we increase our demand for energy now um another thing is bringing AI to the internet and low latency uh this has to do with the Envy link and the Spectrum a and stuff how um you know uh this this system that uh Nvidia is building is going to be roled around bringing a AI to the internet and having really super short latency and response times um that that has to do with the systems that they're developing now um now some something here that Jensen actually pointed out that is kind of a misconception uh about the Black Wall Systems it's because you know every time they've shown the Black Wall Systems you see them as an entire rack but that's actually not the case so uh Jensen pointed out an important thing that the blackwall rack systems they're designed as a rack but they're sold separately as individual components so everybody's rack could be different depending on their specific configuration and how they integrate into their their infrastructure infrastructure and the software works perfectly across the entire rack so no matter what your configuration is or what you pick and choose to to use from the the entire Blackwell system it their software will will work just fine now now another thing is um from so actually before we move on from from the supply chain to the rest of the integration U basically from where it gets made to where it gets installed um it's actually shipped to the location of the you know the data center basically not put together because he these things are huge and heavy um they're huge bracks that that has a lot of physical restraints uh constraints I should say and so you know just because they're shown as a complete rack doesn't mean it actually ships like that it ships in these components and it gets put together close to the data center where it's going to be installed because you know there's these things are huge um now okay moving on to the closeout remarks uh they pointed out well Jensen pointed out some things uh about how Nvidia is modernizing a trillion dollar dollars of data centers to accelerated Computing of course we know they're leading the charge on that which is the reason they have exploded um and you know exploded their revenues and their income and their their earnings have been just not like just home run um they've been great so uh now Blackwell uh like I just mentioned is actually a platform it's not just a GPU it took 5 years and seven chips to realize it he said and uh building these are building size computers um so Nvidia designed all of it down to the smallest detail and can be integrated so it can be integrated as much as possible especially with their software um and another thing is Envy link now H this was this was crazy so 144 gpus can be connected with 259 terabytes per second per rack this is the the kind of speed you get over the internet if if you use NV link um that is crazy I get like 300 megabytes per second fiber like 259 terabytes per second per rack is insane networking speed um and so they're moving more into you know networking and inventing that this is a huge leap especially considering what we have now um nothing gets even close to that 259 terabytes per second is crazy now uh the last thing they kind of closed out with is the Enterprise wave how it has started um and agents and Nims and AI models are you know being built every day and these are the things that are ADV advancing uh you know Enterprise so you know the the call was interesting the earnings I think were great uh with the exception of you know just a slight decline in free cash flow I think everything else looked fantastic as as I was showing you guys and so you know uh that's really it for today's video I hope you guys you know enjoyed it if you guys appreciate me staying on you know uh on after hours for this uh and listening to this call and getting this video out as soon as possible you know please consider subscribing uh please hit the like button down below and share the video with you know whoever you think might find it helpful um but yep that's it for me today I'll talk to you guys next time peace out