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Nyubbie

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08-30

I buy more wow

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07-09

$Goldman Sachs(GS)$ big winner

06-26

All I hear is buy and I bought more!! [Miser]

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06-26

Why buy this crap when you can buy NVDA???

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06-21

Hold so you can buy? I bought more!

Nvidia: We're Not Ready To Reach For This High Flier

06-20

Too long didn't read; I bought more! [Miser]

Nvidia: Valuation Seems Reasonable After Recent Rally

06-20

I didn't read this and I still bought the stock! MOOOOON [Miser]

Nvidia: The Paper Gains Need To Be Converted To Cash

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buy more wow","listText":"I buy more wow","text":"I buy more wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/343682270834712","repostId":"2463448958","repostType":2,"isVote":1,"tweetType":1,"viewCount":126,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":325340852859040,"gmtCreate":1720458354857,"gmtModify":1720458358536,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/GS\"> $Goldman Sachs(GS)$ </a>big winner","listText":"<a href=\"https://ttm.financial/S/GS\"> $Goldman Sachs(GS)$ </a>big winner","text":"$Goldman Sachs(GS)$ big winner","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/325340852859040","isVote":1,"tweetType":1,"viewCount":386,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":321025855492376,"gmtCreate":1719405977822,"gmtModify":1719405981802,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"All I hear is buy and I bought more!!&nbsp;[Miser]&nbsp;&nbsp;","listText":"All I hear is buy and I bought more!!&nbsp;[Miser]&nbsp;&nbsp;","text":"All I hear is buy and I bought more!! [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/321025855492376","repostId":"2446816362","repostType":2,"isVote":1,"tweetType":1,"viewCount":187,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":321024574247128,"gmtCreate":1719405948540,"gmtModify":1719407467633,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"Why buy this crap when you can buy NVDA???","listText":"Why buy this crap when you can buy NVDA???","text":"Why buy this crap when you can buy NVDA???","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/321024574247128","repostId":"2446677683","repostType":2,"isVote":1,"tweetType":1,"viewCount":180,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":319297429459000,"gmtCreate":1718982410279,"gmtModify":1718983006395,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"Hold so you can buy? I bought more!","listText":"Hold so you can buy? I bought more!","text":"Hold so you can buy? I bought more!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319297429459000","repostId":"2445878967","repostType":2,"repost":{"id":"2445878967","kind":"highlight","pubTimestamp":1718981439,"share":"https://ttm.financial/m/news/2445878967?lang=&edition=fundamental","pubTime":"2024-06-21 22:50","market":"us","language":"en","title":"Nvidia: We're Not Ready To Reach For This High Flier","url":"https://stock-news.laohu8.com/highlight/detail?id=2445878967","media":"seekingalpha","summary":"NVIDIA is a premier AI-driven growth story in the semiconductor space, expanding beyond GPUs to AI, VR, and HPC.Despite strong financial performance, its shares are priced to perfection and uncertain ","content":"<html><head></head><body><ul style=\"\"><li><p>NVIDIA is a premier AI-driven growth story in the semiconductor space, expanding beyond GPUs to AI, VR, and HPC.</p></li><li><p>Despite strong financial performance, its shares are priced to perfection and uncertain remains about the long-term growth potential in its key markets.</p></li><li><p>We rate NVDA a Hold based on its super-premium valuation, though we acknowledge that fundamentals are on the company&#39;s side.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" alt=\"BING-JHEN HONG\" title=\"BING-JHEN HONG\" tg-width=\"750\" tg-height=\"500\"/><span>BING-JHEN HONG</span></p><h2 id=\"id_2237748591\">Summary</h2><p>At this point, <a href=\"https://laohu8.com/S/NVDA\">NVIDIA</a> needs no introduction. We are largely value-oriented investors and tend to stay away from situations with tremendous hype and high-flying valuations. But, alas, we&#39;re biting.</p><p>NVIDIA invented the graphics processing unit (&#34;GPU&#34;), hardware originally geared towards serving as the graphics engine in PCs. It has recently extended the application of its GPUs to AI, VR, and high-performance computing (&#34;HPC&#34;). It is also building a platform strategy around connecting its hardware, system software, programmable algorithms, libraries, systems, and services to add value in its key markets (i.e., gaming, automotive, datacenter (&#34;DC&#34;), professional visualization, PC OEMs, and embedded applications). It is undoubtedly the premier AI-driven growth story within the semiconductor space, and, arguably, the broader tech industry.</p><p>Despite its dominant position and unprecedented recent financial performance, we feel it prudent to wait this one out, and give the shares a Hold. We see the shares as priced to perfection and the long-term growth potential of critical end-markets (i.e., AI/ML, VR, and automotive) as untested and uncertain. We acknowledge that these markets are almost certainly going to be fast growers for the foreseeable future, but questions remain about the sustainability of the current pace of growth.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a98749c868c7d63ddccfb277b181f4fc\" alt=\"NVDA Share Price (1Y) (CapIQ)\" title=\"NVDA Share Price (1Y) (CapIQ)\" tg-width=\"640\" tg-height=\"180\"/><span>NVDA Share Price (1Y) (CapIQ)</span></p><h2 id=\"id_2795078279\">Earnings Update</h2><h3 id=\"id_1548565247\">Datacenters</h3><p>In the FQ1, NVDA posted DC revenue of ~$22.6Bn, +23% QoQ and +427% YoY, exceeding the Street&#39;s expectations. The bulk of this result was attributable to DC compute revenues of ~$19.4Bn, which grew 29% QoQ (478% YoY), while networking revenue of ~$3.2Bn <em>declined</em> 5% QoQ (still +242% YoY).</p><p>Management noted that these results were driven by strong demand for its HGX platform due to the aggressive ramp of Training and Inference for LLM and GenAI infrastructure. While all customer segments contributed to the segment&#39;s growth, it was led by Enterprise &amp; Consumer Internet companies with large cloud platforms (n.b., these customers represent ~40% of DC revenues).</p><p>NVDA is sampling H200 in Q1 and is on track to begin shipments in Q2. Its supply for H100s grew, though it continues to be constrained for H200. Blackwell is in full production, with its ramp expected to start in Q3, which would enable material revenues to be realized this year from the launch. Overall, demand for H200s and Blackwell remains well ahead of the available supply, a trend that is expected to persist. Following the official debut of Blackwell, management noted that it had lined up availability at &gt;100 OEM and ODM for its launch (n.b., +2x Hopper at the time of this product&#39;s introduction).</p><p>Within networking, results were largely driven by InfiniBand, though this business was modestly weaker in the quarter due to the timing of supply, while demand remained well above capacity. Management noted that its initial shipments of the Spectrum-X product line (Ethernet) are expected to open a new market for the company and could be a multi-billion-dollar product within a year. The segment is expected to return to sequential growth in Q2.</p><h3 id=\"id_3276516466\">Gaming</h3><p>Gaming revenues (~$2.6Bn) declined ~8% QoQ, but were up 18% YoY, driven by strong consumer demand for the GeForce RTX GPUs. Management noted it sees channel inventory levels normalizing and expects a return to sequential growth for the next quarter. The ProVis segment ($427MM revenue) declined ~8% QoQ, but was up 45% YoY. Desktop workstation GPU sales were weak, though management noted a normalization of channel inventory levels.</p><h3 id=\"id_4015388383\">Auto &amp; Embedded</h3><p>Auto &amp; Embedded revenues grew 17% QoQ and 11% YoY, driven by the continued adoption of its self-driving platforms. Management noted increased adoption of its products by BYD, XPENG, GAC&#39;s AION Hyper Nuro, and others for the DRIVE Thor platform, which now features Blackwell GPU architecture. Lucid and IM Motors are also reportedly using DRIVE Orin to power their automated driving systems.</p><p>Timing the mass adoption of this technology is incredibly difficult, if not impossible, though we believe NVDA is positioned as a leader in the space and a likely beneficiary if it plays out.</p><h2 id=\"id_2948685063\">Valuation</h2><p>Our base case $115 price target (n.b., ~15% implied downside) is based on a ~36x P/E on our 2026E EPS estimate of $32/share (see table below). We believe NVDA deserves a premium multiple, given its strong competitive positioning for DC growth driven by cloud and AI, gaming, autonomous vehicles, and an expanding ecosystem of products and applications (n.b., NVDA 3-year revenue CAGR through the LTM period is ~61% vs ~26% for AMD).</p><p>Our bull case price target of $135 is based on higher 2026E earnings driven by greater DC and AI GPU demand as enterprises find new AI use-cases to justify their spend and continued market share dominance. Other products serving automotive could offer additional support.</p><p>Our bear case price target of $82.5 is based on a reduction in earnings growth momentum as customers integrate and digest their significant GPU investments, souring investor sentiment as competitive pressure from AMD mounts.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8aad690d49b5458d8c5b5a7b615e3bae\" alt=\"Base Case EPS Forecast (Empyrean)\" title=\"Base Case EPS Forecast (Empyrean)\" tg-width=\"489\" tg-height=\"528\"/><span>Base Case EPS Forecast (Empyrean)</span></p><h2 id=\"id_3116957681\">Risks &amp; Catalysts</h2><p>We see 4 key risks facing NVDA:</p><h3 id=\"id_412165149\">Premium Valuation</h3><p>NVDA trades at a premium multiple to its peers. If growth were to slow, its multiple could revert closer to peers, negatively affecting its share price</p><h3 id=\"id_880772906\">Early-Stage Growth Cycle &amp; Competitive Threats</h3><p>NVDA’s future growth is dependent on early-stage tech trends in its DC and automotive businesses. Increasing competition in these applications could slow its growth prospects. For example, at the recent Computex 2024 event, AMD provided an update on its Instinct accelerator roadmap, which contemplates an acceleration of product in the cadence of product introductions to once per year, following NVDA’s move (n.b., previous cycle was 2 years). AMD’s next accelerator, the MI325X, which is expected to become available in Q4 &#39;24, will have increased memory capacity (n.b., 288GB for HBM3e vs. 141GB for NVDA&#39;s H200) and memory bandwidth (n.b., 6TB/s vs. H200 at 4.8TB/s). Following the MI325X, AMD expects to launch the MI350 series in 2025. The MI350 series is expected to provide a ~35x increase in AI inference performance, and will be positioned to compete against NVDA’s B-Series platforms. And in &#39;26, AMD is expected to launch the MI400 series, which will be based on its next-gen CDNA architecture, “Next”, to compete against NVDA’s recently announced R-Series platforms.</p><h3 id=\"id_2298763083\">Changing Consumer Preferences in Gaming</h3><p>The gaming segment could be affected by changing consumer preferences. If NVDA were to fall out of favor with gamers, its business could be affected.</p><h3 id=\"id_1104877048\">Cyclicality</h3><p>The semiconductor industry is well known for boom/bust inventory cycles. A macro-driven inventory correction could have material negative implications for NVDA.</p><p>Given the nature of the risks described above, we see little room for these to move in a favorable direction to become positive catalysts. For example, to cast the premium valuation risk as a positive catalyst, one would have to underwrite further multiple expansion - something which seems highly speculative at this point.</p><h2 id=\"id_3741322798\">Conclusion</h2><p>While we acknowledge that price momentum and fundamentals favor NVDA, we believe the stock’s valuation is reasonably fair. Given our conservative investment philosophy, we are rating the shares a Hold.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: We're Not Ready To Reach For This High Flier</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: We're Not Ready To Reach For This High Flier\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-21 22:50 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4700289-nvidia-stock-price-momentum-fundamentals-positive-fairly-valued-hold><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>NVIDIA is a premier AI-driven growth story in the semiconductor space, expanding beyond GPUs to AI, VR, and HPC.Despite strong financial performance, its shares are priced to perfection and uncertain ...</p>\n\n<a href=\"https://seekingalpha.com/article/4700289-nvidia-stock-price-momentum-fundamentals-positive-fairly-valued-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4512":"苹果概念","BK4549":"软银资本持仓","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0979878070.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"A\" (USD) ACC","BK4529":"IDC概念","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","LU1951198990.SGD":"Natixis Thematics AI & Robotics Fund H-R/A SGD-H","BK4554":"元宇宙及AR概念","NVDA":"英伟达","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","LU2458330169.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A\" (SGD) ACC","BK4566":"资本集团","BK4587":"ChatGPT概念","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0109391861.USD":"富兰克林美国机遇基金A Acc","IE0034235295.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"A\" (USD) ACC","IE00B19Z9505.USD":"美盛-美国大盘成长股A Acc","LU0072462426.USD":"贝莱德全球配置 A2","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","LU0079474960.USD":"联博美国增长基金A","BK4527":"明星科技股","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","BK4588":"碎股","BK4550":"红杉资本持仓","LU0080751232.USD":"富达环球多元动力基金A","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","BK4141":"半导体产品","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","LU1989764664.SGD":"CPR Invest - Global Disruptive Opportunities A2 Acc SGD-H","BK4503":"景林资产持仓","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","BK4551":"寇图资本持仓","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC"},"source_url":"https://seekingalpha.com/article/4700289-nvidia-stock-price-momentum-fundamentals-positive-fairly-valued-hold","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2445878967","content_text":"NVIDIA is a premier AI-driven growth story in the semiconductor space, expanding beyond GPUs to AI, VR, and HPC.Despite strong financial performance, its shares are priced to perfection and uncertain remains about the long-term growth potential in its key markets.We rate NVDA a Hold based on its super-premium valuation, though we acknowledge that fundamentals are on the company's side.BING-JHEN HONGSummaryAt this point, NVIDIA needs no introduction. We are largely value-oriented investors and tend to stay away from situations with tremendous hype and high-flying valuations. But, alas, we're biting.NVIDIA invented the graphics processing unit (\"GPU\"), hardware originally geared towards serving as the graphics engine in PCs. It has recently extended the application of its GPUs to AI, VR, and high-performance computing (\"HPC\"). It is also building a platform strategy around connecting its hardware, system software, programmable algorithms, libraries, systems, and services to add value in its key markets (i.e., gaming, automotive, datacenter (\"DC\"), professional visualization, PC OEMs, and embedded applications). It is undoubtedly the premier AI-driven growth story within the semiconductor space, and, arguably, the broader tech industry.Despite its dominant position and unprecedented recent financial performance, we feel it prudent to wait this one out, and give the shares a Hold. We see the shares as priced to perfection and the long-term growth potential of critical end-markets (i.e., AI/ML, VR, and automotive) as untested and uncertain. We acknowledge that these markets are almost certainly going to be fast growers for the foreseeable future, but questions remain about the sustainability of the current pace of growth.NVDA Share Price (1Y) (CapIQ)Earnings UpdateDatacentersIn the FQ1, NVDA posted DC revenue of ~$22.6Bn, +23% QoQ and +427% YoY, exceeding the Street's expectations. The bulk of this result was attributable to DC compute revenues of ~$19.4Bn, which grew 29% QoQ (478% YoY), while networking revenue of ~$3.2Bn declined 5% QoQ (still +242% YoY).Management noted that these results were driven by strong demand for its HGX platform due to the aggressive ramp of Training and Inference for LLM and GenAI infrastructure. While all customer segments contributed to the segment's growth, it was led by Enterprise & Consumer Internet companies with large cloud platforms (n.b., these customers represent ~40% of DC revenues).NVDA is sampling H200 in Q1 and is on track to begin shipments in Q2. Its supply for H100s grew, though it continues to be constrained for H200. Blackwell is in full production, with its ramp expected to start in Q3, which would enable material revenues to be realized this year from the launch. Overall, demand for H200s and Blackwell remains well ahead of the available supply, a trend that is expected to persist. Following the official debut of Blackwell, management noted that it had lined up availability at >100 OEM and ODM for its launch (n.b., +2x Hopper at the time of this product's introduction).Within networking, results were largely driven by InfiniBand, though this business was modestly weaker in the quarter due to the timing of supply, while demand remained well above capacity. Management noted that its initial shipments of the Spectrum-X product line (Ethernet) are expected to open a new market for the company and could be a multi-billion-dollar product within a year. The segment is expected to return to sequential growth in Q2.GamingGaming revenues (~$2.6Bn) declined ~8% QoQ, but were up 18% YoY, driven by strong consumer demand for the GeForce RTX GPUs. Management noted it sees channel inventory levels normalizing and expects a return to sequential growth for the next quarter. The ProVis segment ($427MM revenue) declined ~8% QoQ, but was up 45% YoY. Desktop workstation GPU sales were weak, though management noted a normalization of channel inventory levels.Auto & EmbeddedAuto & Embedded revenues grew 17% QoQ and 11% YoY, driven by the continued adoption of its self-driving platforms. Management noted increased adoption of its products by BYD, XPENG, GAC's AION Hyper Nuro, and others for the DRIVE Thor platform, which now features Blackwell GPU architecture. Lucid and IM Motors are also reportedly using DRIVE Orin to power their automated driving systems.Timing the mass adoption of this technology is incredibly difficult, if not impossible, though we believe NVDA is positioned as a leader in the space and a likely beneficiary if it plays out.ValuationOur base case $115 price target (n.b., ~15% implied downside) is based on a ~36x P/E on our 2026E EPS estimate of $32/share (see table below). We believe NVDA deserves a premium multiple, given its strong competitive positioning for DC growth driven by cloud and AI, gaming, autonomous vehicles, and an expanding ecosystem of products and applications (n.b., NVDA 3-year revenue CAGR through the LTM period is ~61% vs ~26% for AMD).Our bull case price target of $135 is based on higher 2026E earnings driven by greater DC and AI GPU demand as enterprises find new AI use-cases to justify their spend and continued market share dominance. Other products serving automotive could offer additional support.Our bear case price target of $82.5 is based on a reduction in earnings growth momentum as customers integrate and digest their significant GPU investments, souring investor sentiment as competitive pressure from AMD mounts.Base Case EPS Forecast (Empyrean)Risks & CatalystsWe see 4 key risks facing NVDA:Premium ValuationNVDA trades at a premium multiple to its peers. If growth were to slow, its multiple could revert closer to peers, negatively affecting its share priceEarly-Stage Growth Cycle & Competitive ThreatsNVDA’s future growth is dependent on early-stage tech trends in its DC and automotive businesses. Increasing competition in these applications could slow its growth prospects. For example, at the recent Computex 2024 event, AMD provided an update on its Instinct accelerator roadmap, which contemplates an acceleration of product in the cadence of product introductions to once per year, following NVDA’s move (n.b., previous cycle was 2 years). AMD’s next accelerator, the MI325X, which is expected to become available in Q4 '24, will have increased memory capacity (n.b., 288GB for HBM3e vs. 141GB for NVDA's H200) and memory bandwidth (n.b., 6TB/s vs. H200 at 4.8TB/s). Following the MI325X, AMD expects to launch the MI350 series in 2025. The MI350 series is expected to provide a ~35x increase in AI inference performance, and will be positioned to compete against NVDA’s B-Series platforms. And in '26, AMD is expected to launch the MI400 series, which will be based on its next-gen CDNA architecture, “Next”, to compete against NVDA’s recently announced R-Series platforms.Changing Consumer Preferences in GamingThe gaming segment could be affected by changing consumer preferences. If NVDA were to fall out of favor with gamers, its business could be affected.CyclicalityThe semiconductor industry is well known for boom/bust inventory cycles. A macro-driven inventory correction could have material negative implications for NVDA.Given the nature of the risks described above, we see little room for these to move in a favorable direction to become positive catalysts. For example, to cast the premium valuation risk as a positive catalyst, one would have to underwrite further multiple expansion - something which seems highly speculative at this point.ConclusionWhile we acknowledge that price momentum and fundamentals favor NVDA, we believe the stock’s valuation is reasonably fair. Given our conservative investment philosophy, we are rating the shares a Hold.","news_type":1},"isVote":1,"tweetType":1,"viewCount":301,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":319019704955056,"gmtCreate":1718899104670,"gmtModify":1718901358385,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"Too long didn't read; I bought more!&nbsp;[Miser]&nbsp;&nbsp;","listText":"Too long didn't read; I bought more!&nbsp;[Miser]&nbsp;&nbsp;","text":"Too long didn't read; I bought more! [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319019704955056","repostId":"2444429849","repostType":2,"repost":{"id":"2444429849","kind":"highlight","pubTimestamp":1718853852,"share":"https://ttm.financial/m/news/2444429849?lang=&edition=fundamental","pubTime":"2024-06-20 11:24","market":"sg","language":"en","title":"Nvidia: Valuation Seems Reasonable After Recent Rally","url":"https://stock-news.laohu8.com/highlight/detail?id=2444429849","media":"seekingalpha","summary":"Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.We use a Reverse DCF model to obtain the market-impli","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.</p></li><li><p>We use a Reverse DCF model to obtain the market-implied assumptions of the company&#39;s growth rate, terminal value multiples, and profit margins and compare them against our own assumptions.</p></li><li><p>We believe the company&#39;s Blackwell architecture launch and expanded cloud partnerships with major providers contribute to its competitiveness and growth outlook.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" tg-width=\"750\" tg-height=\"500\"/></p><p>BING-JHEN HONG</p><p></p><p>In our previous analysis of NVIDIA Corporation (NASDAQ:NVDA) (NEOE:NVDA:CA), we highlighted the strong performance of Nvidia’s growth of 126% in CY2023, and we remained positive on Nvidia’s Data Center segment, supported by cloud partnerships and sovereign AI initiatives. For 2024, we projected a 58% overall revenue growth, led by the Data Center, with contributions from Gaming, Professional Visualization, and a recovery in PC GPU revenue, as well as 20.6% growth in the Automotive segment.</p><p>Since our last analysis in March, we started reviewing Nvidia again as its share price had risen by 28% in May, with a further upside of 18.3% left based on our previous price target of <em>$1,294.14 ($129.41 post-stock split). </em>Therefore, we initially aimed to determine whether our expectations for Nvidia’s upside were justified. Since then, Nvidia has overtaken both Apple and Microsoft as the largest company globally by market cap, rising by a further 30% and meeting our price target. Firstly, we conducted a reverse DCF analysis determining the market implied revenue growth forecast, terminal value multiple, and profitability margins. Based on that, we compared the reverse DCF model with our revenue, terminal value and margin assumptions and determined whether our assumptions were appropriate.</p><h2 id=\"id_1356393531\">Sustainable Revenue Growth</h2><p>Firstly, we examined whether our revenue growth forecast is appropriate. Based on the reverse DCF model, holding all previous assumptions constant, we derived the market-implied revenue growth rate for Nvidia based on the current market price.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0ce46a7a6e946a7995df8c13ad343a0e\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Revenue Comparison ($ mln)</strong></p></td><td style=\"text-align:left;\"><p><strong>2024F</strong></p></td><td style=\"text-align:left;\"><p><strong>2025F</strong></p></td><td style=\"text-align:left;\"><p><strong>2026F</strong></p></td><td style=\"text-align:left;\"><p><strong>2027F</strong></p></td><td style=\"text-align:left;\"><p><strong>2028F</strong></p></td><td style=\"text-align:left;\"><p><strong>2029F</strong></p></td><td style=\"text-align:left;\"><p><strong>2030F</strong></p></td><td style=\"text-align:left;\"><p><strong>2031F</strong></p></td><td style=\"text-align:left;\"><p><strong>2032F</strong></p></td><td style=\"text-align:left;\"><p><strong>2033F</strong></p></td><td style=\"text-align:left;\"><p><strong>Avr. (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>Avr. (10-yr)</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue (Reverse DCF)</p></td><td style=\"text-align:left;\"><p>113,185</p></td><td style=\"text-align:left;\"><p>163,293</p></td><td style=\"text-align:left;\"><p>220,004</p></td><td style=\"text-align:left;\"><p>273,487</p></td><td style=\"text-align:left;\"><p>320,027</p></td><td style=\"text-align:left;\"><p>358,148</p></td><td style=\"text-align:left;\"><p>388,012</p></td><td style=\"text-align:left;\"><p>410,660</p></td><td style=\"text-align:left;\"><p>427,439</p></td><td style=\"text-align:left;\"><p>439,664</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue Growth</p></td><td style=\"text-align:left;\"><p>85.8%</p></td><td style=\"text-align:left;\"><p>44.3%</p></td><td style=\"text-align:left;\"><p>34.7%</p></td><td style=\"text-align:left;\"><p>24.3%</p></td><td style=\"text-align:left;\"><p>17.0%</p></td><td style=\"text-align:left;\"><p>11.9%</p></td><td style=\"text-align:left;\"><p>8.3%</p></td><td style=\"text-align:left;\"><p>5.8%</p></td><td style=\"text-align:left;\"><p>4.1%</p></td><td style=\"text-align:left;\"><p>2.9%</p></td><td style=\"text-align:left;\"><p>41.2%</p></td><td style=\"text-align:left;\"><p>23.9%</p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue (Our Previous Forecast)</p></td><td style=\"text-align:left;\"><p>95,720</p></td><td style=\"text-align:left;\"><p>148,848</p></td><td style=\"text-align:left;\"><p>225,273</p></td><td style=\"text-align:left;\"><p>306,238</p></td><td style=\"text-align:left;\"><p>383,284</p></td><td style=\"text-align:left;\"><p>450,785</p></td><td style=\"text-align:left;\"><p>506,357</p></td><td style=\"text-align:left;\"><p>550,053</p></td><td style=\"text-align:left;\"><p>583,280</p></td><td style=\"text-align:left;\"><p>607,943</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue Growth</p></td><td style=\"text-align:left;\"><p>57.1%</p></td><td style=\"text-align:left;\"><p>55.5%</p></td><td style=\"text-align:left;\"><p>51.3%</p></td><td style=\"text-align:left;\"><p>35.9%</p></td><td style=\"text-align:left;\"><p>25.2%</p></td><td style=\"text-align:left;\"><p>17.6%</p></td><td style=\"text-align:left;\"><p>12.3%</p></td><td style=\"text-align:left;\"><p>8.6%</p></td><td style=\"text-align:left;\"><p>6.0%</p></td><td style=\"text-align:left;\"><p>4.2%</p></td><td style=\"text-align:left;\"><p>45.0%</p></td><td style=\"text-align:left;\"><p>27.4%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the reverse DCF model, we derived the revenue growth rate at a forward average of 41.2% in the next 5 years, compared to our average forward growth forecast of 44.8%. Furthermore, we derived a 10-year forward growth of 23.9% from the reverse DCF model, compared to 27.4% from our projections. Therefore, this indicates our revenue growth assumption is higher compared to the calculated growth rate from the reverse DCF model. In our previous analysis, we highlighted that we maintained a more stable long-term growth projection “derived independently based on individual segment projections and modeling” for the company “driven primarily due to its Data Center segment at a forward average of 60.9% underpinned by its AI leadership”.</p><p>We examined the latest developments of the company which could support its growth outlook below, including its product launch of its Blackwell architecture, expanded partnerships, and competition.</p><h3 id=\"id_3707924856\">Competitiveness (Blackwell Launch)</h3><p>Nvidia announced the next-gen Blackwell architecture in March 2024, claiming that it enhances computing and generative AI by providing improvements in scale, performance, and efficiency, with customer data centers planned to be operational by Q4 2024. The Blackwell-architecture GPUs are “manufactured using a custom-built 4NP TSMC process” with 208 bln transistors. Previously, we had highlighted the company’s Blackwell architecture based on the company’s provided roadmap in 2024; thus, we believe this indicates its execution on its continued product launches for Data Center.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Category</strong></p></td><td style=\"text-align:left;\"><p><strong>H100</strong></p></td><td style=\"text-align:left;\"><p><strong>H200</strong></p></td><td style=\"text-align:left;\"><p><strong>B100</strong></p></td><td style=\"text-align:left;\"><p><strong>B200</strong></p></td><td style=\"text-align:left;\"><p><strong>GB200 Superchip</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Price</p></td><td style=\"text-align:left;\"><p>$24,000</p></td><td style=\"text-align:left;\"><p>$24,000</p></td><td style=\"text-align:left;\"><p>$30,000</p></td><td style=\"text-align:left;\"><p>$30,000-$40,000</p></td><td style=\"text-align:left;\"><p>$60,000-$70,000</p></td></tr><tr><td style=\"text-align:left;\"><p>Increase %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>25.0%</p></td><td style=\"text-align:left;\"><p>16.7%</p></td><td style=\"text-align:left;\"><p>85.7%</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Capacity (GB)</p></td><td style=\"text-align:left;\"><p>80.00</p></td><td style=\"text-align:left;\"><p>141.00</p></td><td style=\"text-align:left;\"><p>192.00</p></td><td style=\"text-align:left;\"><p>192.00</p></td><td style=\"text-align:left;\"><p>384.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Bandwidth (GB/s)</p></td><td style=\"text-align:left;\"><p>3,352.00</p></td><td style=\"text-align:left;\"><p>4,800.00</p></td><td style=\"text-align:left;\"><p>8,000.00</p></td><td style=\"text-align:left;\"><p>8,000.00</p></td><td style=\"text-align:left;\"><p>16,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>43.2%</p></td><td style=\"text-align:left;\"><p>66.7%</p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>100.0%</p></td></tr><tr><td style=\"text-align:left;\"><p>TF32 (Teraflops)</p></td><td style=\"text-align:left;\"><p>495.00</p></td><td style=\"text-align:left;\"><p>495.00</p></td><td style=\"text-align:left;\"><p>900.00</p></td><td style=\"text-align:left;\"><p>1,100.00</p></td><td style=\"text-align:left;\"><p>2,500.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>81.8%</p></td><td style=\"text-align:left;\"><p>22.2%</p></td><td style=\"text-align:left;\"><p>127.3%</p></td></tr><tr><td style=\"text-align:left;\"><p>FP16 (Teraflops)</p></td><td style=\"text-align:left;\"><p>989.00</p></td><td style=\"text-align:left;\"><p>989.00</p></td><td style=\"text-align:left;\"><p>1,750.00</p></td><td style=\"text-align:left;\"><p>2,250.00</p></td><td style=\"text-align:left;\"><p>5,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>76.9%</p></td><td style=\"text-align:left;\"><p>28.6%</p></td><td style=\"text-align:left;\"><p>122.2%</p></td></tr><tr><td style=\"text-align:left;\"><p>FP8 (Teraflops)</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>3,500.00</p></td><td style=\"text-align:left;\"><p>4,500.00</p></td><td style=\"text-align:left;\"><p>10,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>76.9%</p></td><td style=\"text-align:left;\"><p>28.6%</p></td><td style=\"text-align:left;\"><p>122.2%</p></td></tr><tr><td style=\"text-align:left;\"><p>FP4 (Teraflops)</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>7,000.00</p></td><td style=\"text-align:left;\"><p>9,000.00</p></td><td style=\"text-align:left;\"><p>20,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>253.7%</p></td><td style=\"text-align:left;\"><p>28.6%</p></td><td style=\"text-align:left;\"><p>122.2%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>According to the above table comparing the GPUs across Nvidia’s portfolio, the Blackwell chips (B100 and B200) show increasing capabilities including memory capacity, memory bandwidth, and improvements in floating-point performance metrics which play important roles in deep learning model training, as well as higher pricing compared to the Hopper chips (H100 and H200).</p><p>Additionally, the GB200 Superchip which consists of two Blackwell GPUs and one Grace CPU, is reported to have a price range of $60,000-$70,000, along with doubled memory capacity and bandwidth in comparison to previous gen B200 and more than 100% of improvements in the above listed floating-point performance metrics for deep learning model training.</p><p>Furthermore, we updated our comparison of the top data center GPU chips of Nvidia with its top competitors. Besides Nvidia, AMD (AMD) is expected to launch its new MI350 chip this year and Intel’s (INTC) new Gaudi 3 is expected to be released in Q2. Furthermore, Nvidia highlighted competition in China from Huawei which is expected to release its new and improved Ascend 910B chip this year as well following its Ascend 910 introduction in 2019.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Data Center GPU Comparison Metrics</strong></p></td><td style=\"text-align:left;\"><p><strong>AMD (MI300x)</strong></p></td><td style=\"text-align:left;\"><p><strong>AMD (MI350)</strong></p></td><td style=\"text-align:left;\"><p>Nvidia (B100)</p></td><td style=\"text-align:left;\"><p><strong>Nvidia (GB200 Superchip)</strong></p></td><td style=\"text-align:left;\"><p><strong>Intel (Gaudi 2)</strong></p></td><td style=\"text-align:left;\"><p>Intel (Gaudi 3)</p></td><td style=\"text-align:left;\"><p>Huawei (Ascend 910B)</p></td></tr><tr><td style=\"text-align:left;\"><p>Processor</p></td><td style=\"text-align:left;\"><p>5nm (TSMC)</p></td><td style=\"text-align:left;\"><p>4nm (TSMC)</p></td><td style=\"text-align:left;\"><p>4nm (TSMC)</p></td><td style=\"text-align:left;\"><p>4nm (TSMC)</p></td><td style=\"text-align:left;\"><p>7nm (TSMC)</p></td><td style=\"text-align:left;\"><p>5nm (TSMC)</p></td><td style=\"text-align:left;\"><p>7nm</p></td></tr><tr><td style=\"text-align:left;\"><p>Transistors (&#39;bln&#39;)</p></td><td style=\"text-align:left;\"><p>153</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>208</p></td><td style=\"text-align:left;\"><p>208</p></td><td style=\"text-align:left;\"><p>&gt;100</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>-</p></td></tr><tr><td style=\"text-align:left;\"><p>FP16 Peak (Teraflops)</p></td><td style=\"text-align:left;\"><p>1,532</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>3,500</p></td><td style=\"text-align:left;\"><p>10,000</p></td><td style=\"text-align:left;\"><p>839</p></td><td style=\"text-align:left;\"><p>1,835</p></td><td style=\"text-align:left;\"><p>320</p></td></tr><tr><td style=\"text-align:left;\"><p>INT 8 (Teraflops)</p></td><td style=\"text-align:left;\"><p>3,064</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>7,000</p></td><td style=\"text-align:left;\"><p>40,000</p></td><td style=\"text-align:left;\"><p>1,628</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>640</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Clock</p></td><td style=\"text-align:left;\"><p>1.9GHz</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>8Gbps HBM3E</p></td><td style=\"text-align:left;\"><p>8Gbps HBM3E</p></td><td style=\"text-align:left;\"><p>1.56GHz</p></td><td style=\"text-align:left;\"><p>3.6GHz</p></td><td style=\"text-align:left;\"><p>-</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Capacity</p></td><td style=\"text-align:left;\"><p>192GB</p></td><td style=\"text-align:left;\"><p>288GB</p></td><td style=\"text-align:left;\"><p>192GB</p></td><td style=\"text-align:left;\"><p>384GB</p></td><td style=\"text-align:left;\"><p>96GB</p></td><td style=\"text-align:left;\"><p>128GB</p></td><td style=\"text-align:left;\"><p>64GB</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Bandwidth</p></td><td style=\"text-align:left;\"><p>5.2TB/sec</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>8TB/sec</p></td><td style=\"text-align:left;\"><p>16TB/sec</p></td><td style=\"text-align:left;\"><p>2.45TB/sec</p></td><td style=\"text-align:left;\"><p>3.7TB/sec</p></td><td style=\"text-align:left;\"><p>-</p></td></tr><tr><td style=\"text-align:left;\"><p>Interconnect Bandwidth</p></td><td style=\"text-align:left;\"><p>896 GB/sec</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>1800GB/s</p></td><td style=\"text-align:left;\"><p>1800GB/s</p></td><td style=\"text-align:left;\"><p>300GB/s</p></td><td style=\"text-align:left;\"><p>600GB/s</p></td><td style=\"text-align:left;\"><p>400G/s</p></td></tr><tr><td style=\"text-align:left;\"><p>Max Power Consumption</p></td><td style=\"text-align:left;\"><p>700W</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>700W</p></td><td style=\"text-align:left;\"><p>1000W</p></td><td style=\"text-align:left;\"><p>600W</p></td><td style=\"text-align:left;\"><p>900W</p></td><td style=\"text-align:left;\"><p>310W</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the table, Nvidia’s Blackwell chips show superior performance capabilities, especially GB200 Superchip which stands out with its 4nm processor, highest transistor counts at 208 bln, and exceptional FP16 and INT8 peak performance metrics, 10,000 teraflops and 40,000 teraflops, respectively. It also offers the largest memory capacity of 384GB and the highest memory bandwidth at 16TB/sec, although it comes with the highest power consumption of 1000W.</p><p>In contrast, AMD has yet to provide details on its MI350 product with limited information about it besides its 4nm process and 288Gb memory capacity, which is lower than the Nvidia GB200. The previous AMD MI300x was built on a 5nm process, providing 1,532 teraflops of FP16 and 3,064 teraflops of INT8 performance with a memory capacity of 192GB and bandwidth of 5.2TB/sec, consuming 700W.</p><p>Furthermore, Intel Gaudi 3 also uses 5nm technology, with 1,835 teraflops FP16 and 128GB memory but has a higher power consumption of 900W. Notably, the Huawei Ascend 910B, although using older 7nm technology, has the lowest power consumption of 310W.</p><p>Overall, our forward average revenue growth rate projections (45%) are higher compared to the market implied growth rate through the reverse DCF model (41.2%), a difference of 3.8% which we expect due to the company’s enhanced competitiveness. For example, we believe the improvements in Nvidia’s data center GPU capabilities with Blackwell highlight the company’s execution of its product roadmap and commitment to future product launches, which could cement its competitiveness.</p><h3 id=\"id_1140507\">Partnerships</h3><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Company</strong></p></td><td style=\"text-align:left;\"><p><strong>Purpose of Adoption of Blackwell</strong></p></td><td style=\"text-align:left;\"><p><strong>Cloud Market Share</strong></p></td><td style=\"text-align:left;\"><p><strong>Avr. Revenue Growth (3-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>Cloud Revenue ($ bln)</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>AWS</p></td><td style=\"text-align:left;\"><p>To securely build and run large AI models on AWS</p></td><td style=\"text-align:left;\"><p>34%</p></td><td style=\"text-align:left;\"><p>26.4%</p></td><td style=\"text-align:left;\"><p>90.76</p></td></tr><tr><td style=\"text-align:left;\"><p>Google Cloud</p></td><td style=\"text-align:left;\"><p>To enable Google Cloud with advanced AI and data analytics capabilities</p></td><td style=\"text-align:left;\"><p>12%</p></td><td style=\"text-align:left;\"><p>37.7%</p></td><td style=\"text-align:left;\"><p>33.09</p></td></tr><tr><td style=\"text-align:left;\"><p>Microsoft</p></td><td style=\"text-align:left;\"><p>To boost Microsoft Azure&#39;s capabilities regarding large-scale AI workloads handling</p></td><td style=\"text-align:left;\"><p>26%</p></td><td style=\"text-align:left;\"><p>38.8%</p></td><td style=\"text-align:left;\"><p>70.20</p></td></tr><tr><td style=\"text-align:left;\"><p>Oracle</p></td><td style=\"text-align:left;\"><p>To enhance Oracle&#39;s AI model capabilities for faster and higher efficiency of data processing and AI training</p></td><td style=\"text-align:left;\"><p>2%</p></td><td style=\"text-align:left;\"><p>30.2%</p></td><td style=\"text-align:left;\"><p>5.70</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Along with the launch of NVIDIA’s Grace Blackwell GPU platform, its cloud partners including AWS (AMZN), Google (GOOG), Microsoft (MSFT), and Oracle (ORCL) announced plans for adoption. Firstly, AWS will “offer the NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs” and enhance the performance of its AI models with Nvidia’s Grace Blackwell GPU and DGX Cloud. Similarly, Google Cloud claims future adoption of the Grace Blackwell platform to its “AI Hypercomputer architecture in two configurations”, while also focusing on the development of trillion-parameter language models. Microsoft aims to improve its AI infrastructure with the integration of Grace Blackwell GB200 with Microsoft Azure. Oracle also plans on adopting Nvidia’s Grace Blackwell platform across its OCI Supercluster and OCI Compute, aiming to improve performance and efficiency for AI workloads such as LLM inference.</p><p>Based on the table above, we believe these expanded partnerships with AWS, Google, Microsoft, and Oracle are significant for Nvidia as these major cloud providers purchase and use Nvidia’s chips. They account for 74% of the global cloud market share combined and have robust growth averages of between 26.4% to 38.8%. Furthermore, according to UBS (UBS), Microsoft is believed to be its largest customer with 19% of revenues last year.</p><p>Overall, we believe the expanded partnerships of Nvidia with the major cloud providers market share combined bodes well for the sustainability of its growth outlook, which is reflected in our projections as we forecasted its forward 3-year growth rate of around 54% on average compared to the reverse DCF model growth which tapers down significantly from 86% to 35% in the next 3 years, as we expect the company’s growth to continue to be sustained by the adoption of upcoming products such as Blackwell.</p><h3 id=\"id_2518720661\">Current Development of CSPs With Their Own AI Chips</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/955260cbea0325acfd8958c6dcb2006b\" tg-width=\"640\" tg-height=\"335\"/></p><p>TrendForce</p><p></p><p>However, according to TrendForce, several cloud service providers such as Microsoft and Google have also been developing their respective AI chip technologies recently. For instance, Microsoft is currently in the process of developing their “in-house AI chip Azure Maia 100” and Cobalt 100, which we covered in our previous analysis. Along with Google’s recent development of its tensor processing unit (TPU) of v5e, which is particularly designed for training large AI models. Despite that, Google stated it will provide the optionality for customers to use Google TPUs and Nvidia’s Blackwell GPUs. Additionally, other major companies such as Tesla, Meta, and OpenAI are also pursuing their own respective development regarding AI accelerator chips.</p><p>Therefore, as competition heats up against Nvidia from key competitors, we believe our projections fairly incorporated this as we tapered down its growth rate beyond 2026. Additionally, while the development of custom AI chips by its cloud customers could affect the company’s growth, we believe Nvidia has an advantage as these companies are not specialized in chip design. While these companies have higher total company absolute R&amp;D expenses than Microsoft, Amazon, and Google, they predominantly focus across the Software &amp; Services (Microsoft), Consumer Discretionary Distribution &amp; Retail (Amazon), and Media &amp; Entertainment industries (Google). Therefore, in comparison, Nvidia is more specialized as it focuses on Semiconductors, enhancing its competitiveness with improved capabilities over competition, including custom chips from cloud providers. For example, in our analysis of Microsoft, we highlighted Microsoft’s Maia 100 GPU trailing behind Nvidia’s H100 chip specifications as it uses older process technology (5nm) and has memory capacity and bandwidth. Furthermore, the Maia 100 would lag behind compared to Nvidia’s B100 chips with an even wider gap as the B100 has twice the number of transistors and 3x higher memory capacity and bandwidth than the Maia 100. Furthermore, we also highlighted the focus on cost as a rationale for custom chip development by cloud providers, such as Microsoft emphasizing Maia enabling cheaper models for customers and “to diversify and provide choices to customers” rather than replacing Nvidia’s high-performance GPUs as well as Amazon highlighting its low-cost AI inference enabled by Inferentia2.</p><h3 id=\"id_2945945714\">Forward Growth</h3><p>Overall, our revenue growth projections (44.8%) are higher compared to the calculated market implied revenue growth of the company (41.2%), but we believe it is appropriate given factors such as the enhanced competitiveness of Nvidia and execution on its product roadmap such as with the upcoming Blackwell launch, which we believe cements its competitive positioning against key competitors and custom chip developments by cloud providers, supporting our expectations for the company to continue outperforming the market growth as reflected by our revenue projections. Additionally, our projection which is more sustainable on a 3-year forward average compared to the market implied growth through the reverse DCF which we believe could be supported by the expanded partnerships of major cloud service providers with Nvidia.</p><h2 id=\"id_3227000819\">Determining Appropriate Terminal Value</h2><p>Furthermore, we conducted another reverse DCF analysis, adjusting our model holding all assumptions constant except for our terminal value which is derived based on the EV/EBITDA multiple.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9747b715cab9de5845d3b411e3e0c6d4\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>Terminal Value</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA</strong></p></td></tr><tr><td style=\"text-align:left;\"><p><strong>Reverse DCF</strong></p></td><td style=\"text-align:left;\"><p>8,091,521</p></td><td style=\"text-align:left;\"><p>19.17x</p></td></tr><tr><td style=\"text-align:left;\"><p><strong>Our DCF</strong></p></td><td style=\"text-align:left;\"><p>9,712,487</p></td><td style=\"text-align:left;\"><p>27.78x</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the table, we calculated the Reverse DCF method a terminal value of $8,091 mln with an EV/EBITDA multiple of 19.17x. In comparison, our previous analysis, however, shows a higher terminal value of $9,712 mln and an EV/EBITDA multiple of 27.78x. Previously, we based our terminal value EV/EBITDA on the 5-year US-only chipmaker average of 27.78x.</p><h3 id=\"id_3270132057\">Industry Multiple</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/87bc458d9fc8a868a53e4b313a36d68c\" tg-width=\"640\" tg-height=\"360\"/></p><p>Seeking Alpha, Investing.com, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA and CAGR Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Revenue CAGR</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>US Only</p></td><td style=\"text-align:left;\"><p>27.78x</p></td><td style=\"text-align:left;\"><p>11.70%</p></td></tr><tr><td style=\"text-align:left;\"><p>European Only</p></td><td style=\"text-align:left;\"><p>11.65x</p></td><td style=\"text-align:left;\"><p>13.44%</p></td></tr><tr><td style=\"text-align:left;\"><p>Asian Only</p></td><td style=\"text-align:left;\"><p>8.26x</p></td><td style=\"text-align:left;\"><p>6.99%</p></td></tr><tr><td style=\"text-align:left;\"><p><strong>Overall</strong></p></td><td style=\"text-align:left;\"><p><strong>21.58x</strong></p></td><td style=\"text-align:left;\"><p><strong>11.18%</strong></p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>We compiled the US-only chipmaker EV/EBITDA and compared it with the non-US chipmaker EV/EBITDA above. The overall chipmaker average is 21.58x, closer to our calculated reverse DCF model multiple of 19.17x. However, the US-only chipmakers have a much higher average of 27.78x compared to 9.96x for non-US chipmakers. Thus, this indicates a premium for US-only chipmakers, which we believe is more appropriate for Nvidia’s valuation.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA and CAGR Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Revenue CAGR</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Logic</p></td><td style=\"text-align:left;\"><p>33.14x</p></td><td style=\"text-align:left;\"><p>16.85%</p></td></tr><tr><td style=\"text-align:left;\"><p>DAO</p></td><td style=\"text-align:left;\"><p>19.89x</p></td><td style=\"text-align:left;\"><p>10.98%</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory</p></td><td style=\"text-align:left;\"><p>6.36x</p></td><td style=\"text-align:left;\"><p>-3.66%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, we categorized companies within the industry based on their primary business segments. The logic segment demonstrates the highest multiple of 33.14x along with the highest CAGR of 16.85. On the other hand, the memory segment shows a relatively lower multiple at 6.36x with a negative CAGR of -3.66%. Hence, with the Logic segment’s higher EV/EBITDA, we believe this supports a higher multiple used for Nvidia’s valuation as a Logic chipmaker.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA and CAGR Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Revenue CAGR</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Higher Growth (20%+)</p></td><td style=\"text-align:left;\"><p>45.80x</p></td><td style=\"text-align:left;\"><p>31.22%</p></td></tr><tr><td style=\"text-align:left;\"><p>Medium Growth (10% to 20%)</p></td><td style=\"text-align:left;\"><p>21.94x</p></td><td style=\"text-align:left;\"><p>11.67%</p></td></tr><tr><td style=\"text-align:left;\"><p>Low Growth (0% to 10%)</p></td><td style=\"text-align:left;\"><p>13.10x</p></td><td style=\"text-align:left;\"><p>4.41%</p></td></tr><tr><td style=\"text-align:left;\"><p>Negative Growth (&lt;0%)</p></td><td style=\"text-align:left;\"><p>8.00x</p></td><td style=\"text-align:left;\"><p>-6.12%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Additionally, we further compiled the above table by stratifying major companies within the industry by their respective growth rates. We observed that companies experiencing higher growth (20%+) hold the highest multiples at 45.80x along with a high CAGR of 31.22%. This contrasts with the companies possessing negative growth (&lt;0%), which are valued at a lower multiple of 8.00x with a CAGR of -6.12%. Thus, this further supports Nvidia’s higher multiple used as it aligns with the high growth category at a CAGR of 49.37%.</p><h3 id=\"id_2193681664\">Company Multiple</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8d03fd23857db8c07e637debc107c290\" tg-width=\"635\" tg-height=\"439\"/></p><p>YCharts</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Nvidia</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>Average</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>EV/EBITDA</p></td><td style=\"text-align:left;\"><p>42.18x</p></td><td style=\"text-align:left;\"><p>55.91x</p></td><td style=\"text-align:left;\"><p>53.23x</p></td><td style=\"text-align:left;\"><p>80.26x</p></td><td style=\"text-align:left;\"><p>42.19x</p></td><td style=\"text-align:left;\"><p>54.75x</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, we analyzed the company’s historical EV/EBITDA above. The company’s EV/EBITDA has been volatile with a significant spike in 2023 but has moderated since. Its 5-year median multiple shows a rising trend. Its 5-year average is 54.75x, thus using its 5-year average EV/EBITDA would result in a much higher terminal value and valuation of the company compared to our assumption based on the 5-year average US-only chipmakers.</p><h3 id=\"id_2858467795\">Forward Multiple</h3><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA Average</strong></p></td><td style=\"text-align:left;\"><p><strong>Multiple</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>US Only</p></td><td style=\"text-align:left;\"><p>27.78x</p></td></tr><tr><td style=\"text-align:left;\"><p>Logic Chipmaker</p></td><td style=\"text-align:left;\"><p>33.14x</p></td></tr><tr><td style=\"text-align:left;\"><p>High Growth</p></td><td style=\"text-align:left;\"><p>45.80x</p></td></tr><tr><td style=\"text-align:left;\"><p>Nvidia Historical</p></td><td style=\"text-align:left;\"><p>54.75x</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Overall, we believe our EV/EBITDA assumption used of 27.78x, based on the US-only average chipmakers, is more appropriate compared to our derived EV/EBITDA based on the reverse DCF model which is more in line with the overall semicon chipmaker average. Furthermore, comparing the average EV/EBITDA in the table summary above, the US-only average has the lowest compared to Logic Chipmaker, High Growth, and Nvidia&#39;s Historical average; thus we believe our assumption is relatively conservative.</p><h2 id=\"id_28603474\">Strong Profit Margins</h2><p>Finally, we conducted the reverse DCF analysis on its profitability margins, holding all other assumptions constant. We adjusted the reverse DCF model to obtain the EBIT and FCF margins based on the current market price.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/fcd2847ba36389af6308a3cbdf5c1810\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EBIT Margin</strong></p></td><td style=\"text-align:left;\"><p><strong>FCF Margin</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Reverse DCF</p></td><td style=\"text-align:left;\"><p>41.6%</p></td><td style=\"text-align:left;\"><p>24.8%</p></td></tr><tr><td style=\"text-align:left;\"><p>Our Previous Analysis</p></td><td style=\"text-align:left;\"><p>56.2%</p></td><td style=\"text-align:left;\"><p>39.4%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>As seen above, the reverse DCF model calculated an average 5-year forward EBIT margin of 41.6% compared to 56.2% for our assumptions based on our previous analysis. Additionally, in terms of FCF margins, the reverse DFC model implies an average 24.8% forward FCF margin, lower compared to our forecasts of 39.4%.</p><h3 id=\"id_4010505352\">Gross and EBIT Margins</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/15df2ef56f27d9e3522347767415845f\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Earnings &amp; Margins</strong></p></td><td style=\"text-align:left;\"><p><strong>2014</strong></p></td><td style=\"text-align:left;\"><p><strong>2015</strong></p></td><td style=\"text-align:left;\"><p><strong>2016</strong></p></td><td style=\"text-align:left;\"><p><strong>2017</strong></p></td><td style=\"text-align:left;\"><p><strong>2018</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>TTM</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Average</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Gross Margin</p></td><td style=\"text-align:left;\"><p>55.51%</p></td><td style=\"text-align:left;\"><p>56.11%</p></td><td style=\"text-align:left;\"><p>58.80%</p></td><td style=\"text-align:left;\"><p>59.93%</p></td><td style=\"text-align:left;\"><p>61.21%</p></td><td style=\"text-align:left;\"><p>61.99%</p></td><td style=\"text-align:left;\"><p>63.31%</p></td><td style=\"text-align:left;\"><p>64.93%</p></td><td style=\"text-align:left;\"><p>56.93%</p></td><td style=\"text-align:left;\"><p>72.72%</p></td><td style=\"text-align:left;\"><p>75.29%</p></td><td style=\"text-align:left;\"><p>66.6%</p></td></tr><tr><td style=\"text-align:left;\"><p>EBIT Margin</p></td><td style=\"text-align:left;\"><p>16.21%</p></td><td style=\"text-align:left;\"><p>17.52%</p></td><td style=\"text-align:left;\"><p>28.03%</p></td><td style=\"text-align:left;\"><p>33.05%</p></td><td style=\"text-align:left;\"><p>32.47%</p></td><td style=\"text-align:left;\"><p>26.07%</p></td><td style=\"text-align:left;\"><p>28.31%</p></td><td style=\"text-align:left;\"><p>37.31%</p></td><td style=\"text-align:left;\"><p>20.68%</p></td><td style=\"text-align:left;\"><p>54.12%</p></td><td style=\"text-align:left;\"><p>59.85%</p></td><td style=\"text-align:left;\"><p>40.05%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the earnings and margins chart above, our derived average forward EBIT margin based on the reverse DCF model (41.6%) corresponds the closest to the company’s historical EBIT margin in 2021 (37.31%). In comparison, our projected EBIT margin (56.2%) is closer to the company’s historical margin in 2023 (54.12%).</p><p>Therefore, we analyzed the specific differences between the company’s margins in 2021 and improvement in 2023. Firstly, in terms of gross margins, the company’s gross margins improved from 64.3% in 2021 to 72.72% in 2023 which indicates it benefited from economies of scale and contributed to its EBIT margin increase. Also, we analyzed in our previous analysis one main reason for the decline in margins in 2022 was due to inventory provisions which had “impacted its gross margins by 7.5%” because of “the slump in the GPU market as its shipments fell by 48%” that year, but expected it to be non-recurring as the GPU market improved beyond that.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Nvidia</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>Average</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Employee Headcount</p></td><td style=\"text-align:left;\"><p>13,775</p></td><td style=\"text-align:left;\"><p>18,975</p></td><td style=\"text-align:left;\"><p>22,473</p></td><td style=\"text-align:left;\"><p>26,196</p></td><td style=\"text-align:left;\"><p>29,600</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Growth %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>37.7%</p></td><td style=\"text-align:left;\"><p>18.4%</p></td><td style=\"text-align:left;\"><p>16.6%</p></td><td style=\"text-align:left;\"><p>13.0%</p></td><td style=\"text-align:left;\"><p>21.4%</p></td></tr><tr><td style=\"text-align:left;\"><p>SG&amp;A ($ mln)</p></td><td style=\"text-align:left;\"><p>1,093</p></td><td style=\"text-align:left;\"><p>1,912</p></td><td style=\"text-align:left;\"><p>2,166</p></td><td style=\"text-align:left;\"><p>2,440</p></td><td style=\"text-align:left;\"><p>2,654</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Growth %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>74.9%</p></td><td style=\"text-align:left;\"><p>13.3%</p></td><td style=\"text-align:left;\"><p>12.7%</p></td><td style=\"text-align:left;\"><p>8.8%</p></td><td style=\"text-align:left;\"><p>27.4%</p></td></tr><tr><td style=\"text-align:left;\"><p>SG&amp;A % of Revenue</p></td><td style=\"text-align:left;\"><p>10.01%</p></td><td style=\"text-align:left;\"><p>11.47%</p></td><td style=\"text-align:left;\"><p>8.05%</p></td><td style=\"text-align:left;\"><p>9.05%</p></td><td style=\"text-align:left;\"><p>4.36%</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>R&amp;D ($ mln)</p></td><td style=\"text-align:left;\"><p>2,829</p></td><td style=\"text-align:left;\"><p>3,924</p></td><td style=\"text-align:left;\"><p>5,268</p></td><td style=\"text-align:left;\"><p>7,339</p></td><td style=\"text-align:left;\"><p>8,675</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Growth %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>38.7%</p></td><td style=\"text-align:left;\"><p>34.3%</p></td><td style=\"text-align:left;\"><p>39.3%</p></td><td style=\"text-align:left;\"><p>18.2%</p></td><td style=\"text-align:left;\"><p>32.6%</p></td></tr><tr><td style=\"text-align:left;\"><p>R&amp;D % of Revenue</p></td><td style=\"text-align:left;\"><p>25.91%</p></td><td style=\"text-align:left;\"><p>23.53%</p></td><td style=\"text-align:left;\"><p>19.57%</p></td><td style=\"text-align:left;\"><p>27.21%</p></td><td style=\"text-align:left;\"><p>14.24%</p></td><td style=\"text-align:left;\"><p></p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, another factor in the increased margins is lower growth in SG&amp;A and R&amp;D expenses. As stated by management, the increase in R&amp;D as well as SG&amp;A for fiscal year 2023 “was primarily driven by increased compensation and employee growth”. We compared the employee growth of Nvidia with its SG&amp;A and R&amp;D expense growth. As seen in the table, the company’s SG&amp;A expense growth has been lower than employee growth and revenue growth between 2021 to 2023, leading to lower SG&amp;A % of revenue from 8.05% to 4.36%. We believe this could be due to the company’s business model with an ecosystem of partners including a network of cloud providers, PC &amp; server makers, and distributors, allowing the company to depend on its established partner ecosystems to increase sales rather than requiring to scale its direct sales force.</p><p>On the other hand, its R&amp;D expenses growth had been higher than employee growth over the period. However, its R&amp;D expenses growth had been lower than revenue growth, leading to a decline of R&amp;D % of Revenue from 19.57% in 2021 to 14.24% in 2023. We believe the reason for this is related to its business model, as the company is a chip designer. It designs main chip architectures such as Blackwell and focuses on developments to improve its chipset architectures; thus we believe its business model primarily requires better-skilled employees and talent which the company could attract by increasing its compensation, explaining the higher expense growth compared to employee growth.</p><p>Overall, we believe the company could at least sustain its margins around its historical 2023 levels, by maintaining its level of economies of scale as its sales capacity is much higher compared to 2021. Additionally, we expect its operating expenses (R&amp;D and SG&amp;A) % of Revenue to be maintained due to its business model. We believe the company’s partner ecosystem is more established compared to 2021 as it has expanded partnerships with key cloud partners as well as management highlighted in its recent earnings briefing that “Blackwell will be available in over 100 OEM and ODM systems at launch, more than double the number of Hopper&#39;s launch”. Furthermore, we believe its increased compensation levels could indicate its ability to attract and retain better-skilled employees compared to 2021.</p><h3 id=\"id_2296655564\">FCF Margins</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e81bbff1ef994c48084383e3ddc0bf29\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Earnings &amp; Margins</strong></p></td><td style=\"text-align:left;\"><p><strong>2014</strong></p></td><td style=\"text-align:left;\"><p><strong>2015</strong></p></td><td style=\"text-align:left;\"><p><strong>2016</strong></p></td><td style=\"text-align:left;\"><p><strong>2017</strong></p></td><td style=\"text-align:left;\"><p><strong>2018</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>TTM</strong></p></td><td style=\"text-align:left;\"><p><strong>5-yr Avg</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Free Cash Flow Margin (Capex Only)</p></td><td style=\"text-align:left;\"><p>17.05%</p></td><td style=\"text-align:left;\"><p>21.86%</p></td><td style=\"text-align:left;\"><p>21.70%</p></td><td style=\"text-align:left;\"><p>29.88%</p></td><td style=\"text-align:left;\"><p>26.30%</p></td><td style=\"text-align:left;\"><p>38.22%</p></td><td style=\"text-align:left;\"><p>28.75%</p></td><td style=\"text-align:left;\"><p>30.82%</p></td><td style=\"text-align:left;\"><p>14.10%</p></td><td style=\"text-align:left;\"><p>43.56%</p></td><td style=\"text-align:left;\"><p>48.49%</p></td><td style=\"text-align:left;\"><p>33.1%</p></td></tr><tr><td style=\"text-align:left;\"><p>Adjusted CapEx/Revenue</p></td><td style=\"text-align:left;\"><p>2.6%</p></td><td style=\"text-align:left;\"><p>1.7%</p></td><td style=\"text-align:left;\"><p>2.5%</p></td><td style=\"text-align:left;\"><p>6.1%</p></td><td style=\"text-align:left;\"><p>5.1%</p></td><td style=\"text-align:left;\"><p>4.5%</p></td><td style=\"text-align:left;\"><p>6.8%</p></td><td style=\"text-align:left;\"><p>3.6%</p></td><td style=\"text-align:left;\"><p>6.8%</p></td><td style=\"text-align:left;\"><p>1.8%</p></td><td style=\"text-align:left;\"><p>1.5%</p></td><td style=\"text-align:left;\"><p>4.1%</p></td></tr><tr><td style=\"text-align:left;\"><p>Adjusted CapEx/Fixed Assets</p></td><td style=\"text-align:left;\"><p>8.2%</p></td><td style=\"text-align:left;\"><p>6.5%</p></td><td style=\"text-align:left;\"><p>13.5%</p></td><td style=\"text-align:left;\"><p>29.9%</p></td><td style=\"text-align:left;\"><p>21.9%</p></td><td style=\"text-align:left;\"><p>13.5%</p></td><td style=\"text-align:left;\"><p>8.9%</p></td><td style=\"text-align:left;\"><p>6.4%</p></td><td style=\"text-align:left;\"><p>10.1%</p></td><td style=\"text-align:left;\"><p>5.0%</p></td><td style=\"text-align:left;\"><p>5.1%</p></td><td style=\"text-align:left;\"><p>7.1%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, the reverse DCF model average forward FCF margins (24.8%) are closer to the company’s historical FCF margins in 2020 (28.75%). In comparison, our projected forward average FCF margin (39.4%) is higher and more aligned with its 2023 FCF margin (43.56%). The improvement of the company’s FCF margin is mainly due to the rise in its EBIT margin as explained above from 2021 to 2023 (16.8%). Furthermore, another factor for the increase in FCF margins is due to its higher EBIT margins as explained above as well as lower capex intensity. From the table above, its capex % of revenue and fixed assets declined in 2023 and TTM to its lowest levels over the period which we believe is due to the lean operating business model of Nvidia as a fabless chipmaker with minimal capex requirements to support revenue growth, depending on foundry partners such as TSMC.</p><h3 id=\"id_2563638781\">Forward Margins</h3><p>Overall, the reverse DCF model margins are lower compared to our projected margins in terms of both EBIT and FCF margins. The reverse DCF EBIT average forward margins (41.6%) are in line with the company’s historical 2021 margin levels, while our projected margins are closer to its 2023 margins. We believe our margin assumptions are more appropriate as the company’s EBIT margin has improved between 2021 to 2023 due to improved economies of scale with higher gross margins as well as its lower operating expenses including SG&amp;A and R&amp;D due to its business model depending on its established partner ecosystem for sales and its R&amp;D activities as a chip designer. Furthermore, we expect its higher sales capacity and improved partner ecosystem and enhanced R&amp;D capabilities to sustain its current margin levels going forward; thus we believe our forecasted margins to be more appropriate. Additionally, we highlighted the improved EBIT margins supporting its FCF, which bodes well for its FCF margins.</p><h2 id=\"id_2066159317\">Risk: Growth Outlook</h2><p>Among the 3 factors analyzed, we believe our assumptions are appropriate compared to the reversed DCF model. However, we believe revenue growth could be a risk due to competitive factors as AMD is expected to release more details for its upcoming launch of its MI350X, and data center customers invest in their chip development which leads us to await further details on their performance capabilities to determine whether they could be formidable rivals to Nvidia. Based on our projections previously derived based on market growth and competitive factor for Nvidia, the competitive factor contributes 21% of growth for its Data Center segment. Further, Nvidia faces geopolitical risks such as in China with the imposition of sanctions on sales to Chinese chipmakers, which could affect its competitiveness in that market. China accounted for 17% of its total revenues in FY2024.</p><h2 id=\"id_1998547241\">Valuation</h2><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/4048dc1eeb437f7d3203c3adf2c80170\" tg-width=\"640\" tg-height=\"360\"/></p><p>Khaveen Investments</p><p></p><p>We maintain the same assumption for our valuation from our previous analysis, as we have thoroughly justified the appropriateness in this analysis but with a lower discount rate of 13.5% (company’s WACC). This includes revenue growth (57.1%), EV/EBITDA based on US-only chipmakers (27.78x), average forward EBIT (56.2%), and FCF margin (39.4%) and derived an upside of 8.84%.</p><h2 id=\"id_3188397411\">Verdict</h2><p>We believe our 5-year forward average revenue growth projections for Nvidia are appropriate, albeit slightly higher than our market-implied growth assumption (44.8% vs 41.2%), driven by the execution of its product roadmap with new products including Blackwell supporting its competitiveness. Furthermore, we believe Nvidia&#39;s strong partnerships with major cloud providers further could contribute to sustained growth. In terms of the terminal value, we believe our EV/EBITDA assumption of 27.78x, based on the US-only average for chipmakers, is more appropriate than the reverse DCF model-derived value, which aligns with the overall semiconductor average. The US-only average is the lowest compared to Logic Chipmaker, High Growth, and Nvidia&#39;s historical averages, making our assumption relatively conservative. Finally, we believe our higher margin projections compared to the reverse DCF are more appropriate, reflecting Nvidia&#39;s improved economies of scale, higher gross margins, and lower operating expenses. Also, we expect its higher sales capacity, robust partner ecosystem, and advanced R&amp;D capabilities to sustain these margins and positively contribute to its robust FCFs. However, Nvidia’s share price has rocketed by 43% in the past month and 58% since our last coverage, meeting our price target while overtaking Apple and Microsoft as the most valuable company. Therefore, we believe its current valuation is appropriate, and we have updated our latest price target of <em>$147.57</em> (14% higher than $129.71 previously mainly due to a lower discount rate) indicates limited upside in the near term of 8.84% based on our current conservative assumptions; thus we now downgrade it as a <em>Hold.</em></p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: Valuation Seems Reasonable After Recent Rally</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: Valuation Seems Reasonable After Recent Rally\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-20 11:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4699963-nvidia-stock-valuation-seems-reasonable-after-recent-rally-downgrade-hold><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.We use a Reverse DCF model to obtain the market-...</p>\n\n<a href=\"https://seekingalpha.com/article/4699963-nvidia-stock-valuation-seems-reasonable-after-recent-rally-downgrade-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MSFT":"微软","BK4227":"交易和支付处理服务","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","BK4525":"远程办公概念","NVDA":"英伟达","BK4587":"ChatGPT概念","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","BK4575":"芯片概念","LU0171293334.USD":"贝莱德英国基金A2","LU0310800965.SGD":"FTIF - Templeton Global Balanced A Acc SGD","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","BK4077":"互动媒体与服务","ORCL":"甲骨文","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","UBS":"瑞银","INTC":"英特尔","LU0949170772.SGD":"Blackrock Global Equity Income A6 SGD-H","LU1691799644.USD":"Amundi Funds Polen Capital Global Growth A2 (C) USD","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","BK4122":"互联网与直销零售","BK4574":"无人驾驶","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","GOOGL":"谷歌A","AMD":"美国超微公司","LU0985489474.SGD":"First Eagle Amundi International AHS-C SGD-H","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","LU0149725797.USD":"汇丰美国股市经济规模基金","LU0878866978.SGD":"First Eagle Amundi International AHS-QD SGD-H","LU0738911758.USD":"Blackrock Global Equity Income A6 USD","GOOG":"谷歌","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","BK4548":"巴美列捷福持仓","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU2458330169.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A\" (SGD) ACC","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0068578508.USD":"First Eagle Amundi International Cl AU-C USD","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","BK4516":"特朗普概念","LU1506573853.SGD":"MANULIFE GF GLOBAL EQUITY \"AA\" (SGD) INC","BK4554":"元宇宙及AR概念","BK4515":"5G概念","LU0056508442.USD":"贝莱德世界科技基金A2","LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1","BK4585":"ETF&股票定投概念"},"source_url":"https://seekingalpha.com/article/4699963-nvidia-stock-valuation-seems-reasonable-after-recent-rally-downgrade-hold","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2444429849","content_text":"Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.We use a Reverse DCF model to obtain the market-implied assumptions of the company's growth rate, terminal value multiples, and profit margins and compare them against our own assumptions.We believe the company's Blackwell architecture launch and expanded cloud partnerships with major providers contribute to its competitiveness and growth outlook.BING-JHEN HONGIn our previous analysis of NVIDIA Corporation (NASDAQ:NVDA) (NEOE:NVDA:CA), we highlighted the strong performance of Nvidia’s growth of 126% in CY2023, and we remained positive on Nvidia’s Data Center segment, supported by cloud partnerships and sovereign AI initiatives. For 2024, we projected a 58% overall revenue growth, led by the Data Center, with contributions from Gaming, Professional Visualization, and a recovery in PC GPU revenue, as well as 20.6% growth in the Automotive segment.Since our last analysis in March, we started reviewing Nvidia again as its share price had risen by 28% in May, with a further upside of 18.3% left based on our previous price target of $1,294.14 ($129.41 post-stock split). Therefore, we initially aimed to determine whether our expectations for Nvidia’s upside were justified. Since then, Nvidia has overtaken both Apple and Microsoft as the largest company globally by market cap, rising by a further 30% and meeting our price target. Firstly, we conducted a reverse DCF analysis determining the market implied revenue growth forecast, terminal value multiple, and profitability margins. Based on that, we compared the reverse DCF model with our revenue, terminal value and margin assumptions and determined whether our assumptions were appropriate.Sustainable Revenue GrowthFirstly, we examined whether our revenue growth forecast is appropriate. Based on the reverse DCF model, holding all previous assumptions constant, we derived the market-implied revenue growth rate for Nvidia based on the current market price.Company Data, Khaveen InvestmentsRevenue Comparison ($ mln)2024F2025F2026F2027F2028F2029F2030F2031F2032F2033FAvr. (5-yr)Avr. (10-yr)Revenue (Reverse DCF)113,185163,293220,004273,487320,027358,148388,012410,660427,439439,664Revenue Growth85.8%44.3%34.7%24.3%17.0%11.9%8.3%5.8%4.1%2.9%41.2%23.9%Revenue (Our Previous Forecast)95,720148,848225,273306,238383,284450,785506,357550,053583,280607,943Revenue Growth57.1%55.5%51.3%35.9%25.2%17.6%12.3%8.6%6.0%4.2%45.0%27.4%Click to enlargeSource: Company Data, Khaveen InvestmentsBased on the reverse DCF model, we derived the revenue growth rate at a forward average of 41.2% in the next 5 years, compared to our average forward growth forecast of 44.8%. Furthermore, we derived a 10-year forward growth of 23.9% from the reverse DCF model, compared to 27.4% from our projections. Therefore, this indicates our revenue growth assumption is higher compared to the calculated growth rate from the reverse DCF model. In our previous analysis, we highlighted that we maintained a more stable long-term growth projection “derived independently based on individual segment projections and modeling” for the company “driven primarily due to its Data Center segment at a forward average of 60.9% underpinned by its AI leadership”.We examined the latest developments of the company which could support its growth outlook below, including its product launch of its Blackwell architecture, expanded partnerships, and competition.Competitiveness (Blackwell Launch)Nvidia announced the next-gen Blackwell architecture in March 2024, claiming that it enhances computing and generative AI by providing improvements in scale, performance, and efficiency, with customer data centers planned to be operational by Q4 2024. The Blackwell-architecture GPUs are “manufactured using a custom-built 4NP TSMC process” with 208 bln transistors. Previously, we had highlighted the company’s Blackwell architecture based on the company’s provided roadmap in 2024; thus, we believe this indicates its execution on its continued product launches for Data Center.CategoryH100H200B100B200GB200 SuperchipPrice$24,000$24,000$30,000$30,000-$40,000$60,000-$70,000Increase %0.0%25.0%16.7%85.7%Memory Capacity (GB)80.00141.00192.00192.00384.00Memory Bandwidth (GB/s)3,352.004,800.008,000.008,000.0016,000.00Improvement %43.2%66.7%0.0%100.0%TF32 (Teraflops)495.00495.00900.001,100.002,500.00Improvement %0.0%81.8%22.2%127.3%FP16 (Teraflops)989.00989.001,750.002,250.005,000.00Improvement %0.0%76.9%28.6%122.2%FP8 (Teraflops)1,979.001,979.003,500.004,500.0010,000.00Improvement %0.0%76.9%28.6%122.2%FP4 (Teraflops)1,979.001,979.007,000.009,000.0020,000.00Improvement %0.0%253.7%28.6%122.2%Click to enlargeSource: Company Data, Khaveen InvestmentsAccording to the above table comparing the GPUs across Nvidia’s portfolio, the Blackwell chips (B100 and B200) show increasing capabilities including memory capacity, memory bandwidth, and improvements in floating-point performance metrics which play important roles in deep learning model training, as well as higher pricing compared to the Hopper chips (H100 and H200).Additionally, the GB200 Superchip which consists of two Blackwell GPUs and one Grace CPU, is reported to have a price range of $60,000-$70,000, along with doubled memory capacity and bandwidth in comparison to previous gen B200 and more than 100% of improvements in the above listed floating-point performance metrics for deep learning model training.Furthermore, we updated our comparison of the top data center GPU chips of Nvidia with its top competitors. Besides Nvidia, AMD (AMD) is expected to launch its new MI350 chip this year and Intel’s (INTC) new Gaudi 3 is expected to be released in Q2. Furthermore, Nvidia highlighted competition in China from Huawei which is expected to release its new and improved Ascend 910B chip this year as well following its Ascend 910 introduction in 2019.Data Center GPU Comparison MetricsAMD (MI300x)AMD (MI350)Nvidia (B100)Nvidia (GB200 Superchip)Intel (Gaudi 2)Intel (Gaudi 3)Huawei (Ascend 910B)Processor5nm (TSMC)4nm (TSMC)4nm (TSMC)4nm (TSMC)7nm (TSMC)5nm (TSMC)7nmTransistors ('bln')153-208208>100--FP16 Peak (Teraflops)1,532-3,50010,0008391,835320INT 8 (Teraflops)3,064-7,00040,0001,628-640Memory Clock1.9GHz-8Gbps HBM3E8Gbps HBM3E1.56GHz3.6GHz-Memory Capacity192GB288GB192GB384GB96GB128GB64GBMemory Bandwidth5.2TB/sec-8TB/sec16TB/sec2.45TB/sec3.7TB/sec-Interconnect Bandwidth896 GB/sec-1800GB/s1800GB/s300GB/s600GB/s400G/sMax Power Consumption700W-700W1000W600W900W310WClick to enlargeSource: Company Data, Khaveen InvestmentsBased on the table, Nvidia’s Blackwell chips show superior performance capabilities, especially GB200 Superchip which stands out with its 4nm processor, highest transistor counts at 208 bln, and exceptional FP16 and INT8 peak performance metrics, 10,000 teraflops and 40,000 teraflops, respectively. It also offers the largest memory capacity of 384GB and the highest memory bandwidth at 16TB/sec, although it comes with the highest power consumption of 1000W.In contrast, AMD has yet to provide details on its MI350 product with limited information about it besides its 4nm process and 288Gb memory capacity, which is lower than the Nvidia GB200. The previous AMD MI300x was built on a 5nm process, providing 1,532 teraflops of FP16 and 3,064 teraflops of INT8 performance with a memory capacity of 192GB and bandwidth of 5.2TB/sec, consuming 700W.Furthermore, Intel Gaudi 3 also uses 5nm technology, with 1,835 teraflops FP16 and 128GB memory but has a higher power consumption of 900W. Notably, the Huawei Ascend 910B, although using older 7nm technology, has the lowest power consumption of 310W.Overall, our forward average revenue growth rate projections (45%) are higher compared to the market implied growth rate through the reverse DCF model (41.2%), a difference of 3.8% which we expect due to the company’s enhanced competitiveness. For example, we believe the improvements in Nvidia’s data center GPU capabilities with Blackwell highlight the company’s execution of its product roadmap and commitment to future product launches, which could cement its competitiveness.PartnershipsCompanyPurpose of Adoption of BlackwellCloud Market ShareAvr. Revenue Growth (3-yr)Cloud Revenue ($ bln)AWSTo securely build and run large AI models on AWS34%26.4%90.76Google CloudTo enable Google Cloud with advanced AI and data analytics capabilities12%37.7%33.09MicrosoftTo boost Microsoft Azure's capabilities regarding large-scale AI workloads handling26%38.8%70.20OracleTo enhance Oracle's AI model capabilities for faster and higher efficiency of data processing and AI training2%30.2%5.70Click to enlargeSource: Company Data, Khaveen InvestmentsAlong with the launch of NVIDIA’s Grace Blackwell GPU platform, its cloud partners including AWS (AMZN), Google (GOOG), Microsoft (MSFT), and Oracle (ORCL) announced plans for adoption. Firstly, AWS will “offer the NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs” and enhance the performance of its AI models with Nvidia’s Grace Blackwell GPU and DGX Cloud. Similarly, Google Cloud claims future adoption of the Grace Blackwell platform to its “AI Hypercomputer architecture in two configurations”, while also focusing on the development of trillion-parameter language models. Microsoft aims to improve its AI infrastructure with the integration of Grace Blackwell GB200 with Microsoft Azure. Oracle also plans on adopting Nvidia’s Grace Blackwell platform across its OCI Supercluster and OCI Compute, aiming to improve performance and efficiency for AI workloads such as LLM inference.Based on the table above, we believe these expanded partnerships with AWS, Google, Microsoft, and Oracle are significant for Nvidia as these major cloud providers purchase and use Nvidia’s chips. They account for 74% of the global cloud market share combined and have robust growth averages of between 26.4% to 38.8%. Furthermore, according to UBS (UBS), Microsoft is believed to be its largest customer with 19% of revenues last year.Overall, we believe the expanded partnerships of Nvidia with the major cloud providers market share combined bodes well for the sustainability of its growth outlook, which is reflected in our projections as we forecasted its forward 3-year growth rate of around 54% on average compared to the reverse DCF model growth which tapers down significantly from 86% to 35% in the next 3 years, as we expect the company’s growth to continue to be sustained by the adoption of upcoming products such as Blackwell.Current Development of CSPs With Their Own AI ChipsTrendForceHowever, according to TrendForce, several cloud service providers such as Microsoft and Google have also been developing their respective AI chip technologies recently. For instance, Microsoft is currently in the process of developing their “in-house AI chip Azure Maia 100” and Cobalt 100, which we covered in our previous analysis. Along with Google’s recent development of its tensor processing unit (TPU) of v5e, which is particularly designed for training large AI models. Despite that, Google stated it will provide the optionality for customers to use Google TPUs and Nvidia’s Blackwell GPUs. Additionally, other major companies such as Tesla, Meta, and OpenAI are also pursuing their own respective development regarding AI accelerator chips.Therefore, as competition heats up against Nvidia from key competitors, we believe our projections fairly incorporated this as we tapered down its growth rate beyond 2026. Additionally, while the development of custom AI chips by its cloud customers could affect the company’s growth, we believe Nvidia has an advantage as these companies are not specialized in chip design. While these companies have higher total company absolute R&D expenses than Microsoft, Amazon, and Google, they predominantly focus across the Software & Services (Microsoft), Consumer Discretionary Distribution & Retail (Amazon), and Media & Entertainment industries (Google). Therefore, in comparison, Nvidia is more specialized as it focuses on Semiconductors, enhancing its competitiveness with improved capabilities over competition, including custom chips from cloud providers. For example, in our analysis of Microsoft, we highlighted Microsoft’s Maia 100 GPU trailing behind Nvidia’s H100 chip specifications as it uses older process technology (5nm) and has memory capacity and bandwidth. Furthermore, the Maia 100 would lag behind compared to Nvidia’s B100 chips with an even wider gap as the B100 has twice the number of transistors and 3x higher memory capacity and bandwidth than the Maia 100. Furthermore, we also highlighted the focus on cost as a rationale for custom chip development by cloud providers, such as Microsoft emphasizing Maia enabling cheaper models for customers and “to diversify and provide choices to customers” rather than replacing Nvidia’s high-performance GPUs as well as Amazon highlighting its low-cost AI inference enabled by Inferentia2.Forward GrowthOverall, our revenue growth projections (44.8%) are higher compared to the calculated market implied revenue growth of the company (41.2%), but we believe it is appropriate given factors such as the enhanced competitiveness of Nvidia and execution on its product roadmap such as with the upcoming Blackwell launch, which we believe cements its competitive positioning against key competitors and custom chip developments by cloud providers, supporting our expectations for the company to continue outperforming the market growth as reflected by our revenue projections. Additionally, our projection which is more sustainable on a 3-year forward average compared to the market implied growth through the reverse DCF which we believe could be supported by the expanded partnerships of major cloud service providers with Nvidia.Determining Appropriate Terminal ValueFurthermore, we conducted another reverse DCF analysis, adjusting our model holding all assumptions constant except for our terminal value which is derived based on the EV/EBITDA multiple.Company Data, Khaveen InvestmentsComparisonTerminal ValueEV/EBITDAReverse DCF8,091,52119.17xOur DCF9,712,48727.78xClick to enlargeSource: Company Data, Khaveen InvestmentsBased on the table, we calculated the Reverse DCF method a terminal value of $8,091 mln with an EV/EBITDA multiple of 19.17x. In comparison, our previous analysis, however, shows a higher terminal value of $9,712 mln and an EV/EBITDA multiple of 27.78x. Previously, we based our terminal value EV/EBITDA on the 5-year US-only chipmaker average of 27.78x.Industry MultipleSeeking Alpha, Investing.com, Khaveen InvestmentsEV/EBITDA and CAGR ComparisonEV/EBITDA (5-yr)5-year Revenue CAGRUS Only27.78x11.70%European Only11.65x13.44%Asian Only8.26x6.99%Overall21.58x11.18%Click to enlargeSource: Company Data, Khaveen InvestmentsWe compiled the US-only chipmaker EV/EBITDA and compared it with the non-US chipmaker EV/EBITDA above. The overall chipmaker average is 21.58x, closer to our calculated reverse DCF model multiple of 19.17x. However, the US-only chipmakers have a much higher average of 27.78x compared to 9.96x for non-US chipmakers. Thus, this indicates a premium for US-only chipmakers, which we believe is more appropriate for Nvidia’s valuation.EV/EBITDA and CAGR ComparisonEV/EBITDA (5-yr)5-year Revenue CAGRLogic33.14x16.85%DAO19.89x10.98%Memory6.36x-3.66%Click to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, we categorized companies within the industry based on their primary business segments. The logic segment demonstrates the highest multiple of 33.14x along with the highest CAGR of 16.85. On the other hand, the memory segment shows a relatively lower multiple at 6.36x with a negative CAGR of -3.66%. Hence, with the Logic segment’s higher EV/EBITDA, we believe this supports a higher multiple used for Nvidia’s valuation as a Logic chipmaker.EV/EBITDA and CAGR ComparisonEV/EBITDA (5-yr)5-year Revenue CAGRHigher Growth (20%+)45.80x31.22%Medium Growth (10% to 20%)21.94x11.67%Low Growth (0% to 10%)13.10x4.41%Negative Growth (<0%)8.00x-6.12%Click to enlargeSource: Company Data, Khaveen InvestmentsAdditionally, we further compiled the above table by stratifying major companies within the industry by their respective growth rates. We observed that companies experiencing higher growth (20%+) hold the highest multiples at 45.80x along with a high CAGR of 31.22%. This contrasts with the companies possessing negative growth (<0%), which are valued at a lower multiple of 8.00x with a CAGR of -6.12%. Thus, this further supports Nvidia’s higher multiple used as it aligns with the high growth category at a CAGR of 49.37%.Company MultipleYChartsNvidia20192020202120222023AverageEV/EBITDA42.18x55.91x53.23x80.26x42.19x54.75xClick to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, we analyzed the company’s historical EV/EBITDA above. The company’s EV/EBITDA has been volatile with a significant spike in 2023 but has moderated since. Its 5-year median multiple shows a rising trend. Its 5-year average is 54.75x, thus using its 5-year average EV/EBITDA would result in a much higher terminal value and valuation of the company compared to our assumption based on the 5-year average US-only chipmakers.Forward MultipleEV/EBITDA AverageMultipleUS Only27.78xLogic Chipmaker33.14xHigh Growth45.80xNvidia Historical54.75xClick to enlargeSource: Company Data, Khaveen InvestmentsOverall, we believe our EV/EBITDA assumption used of 27.78x, based on the US-only average chipmakers, is more appropriate compared to our derived EV/EBITDA based on the reverse DCF model which is more in line with the overall semicon chipmaker average. Furthermore, comparing the average EV/EBITDA in the table summary above, the US-only average has the lowest compared to Logic Chipmaker, High Growth, and Nvidia's Historical average; thus we believe our assumption is relatively conservative.Strong Profit MarginsFinally, we conducted the reverse DCF analysis on its profitability margins, holding all other assumptions constant. We adjusted the reverse DCF model to obtain the EBIT and FCF margins based on the current market price.Company Data, Khaveen InvestmentsComparisonEBIT MarginFCF MarginReverse DCF41.6%24.8%Our Previous Analysis56.2%39.4%Click to enlargeSource: Company Data, Khaveen InvestmentsAs seen above, the reverse DCF model calculated an average 5-year forward EBIT margin of 41.6% compared to 56.2% for our assumptions based on our previous analysis. Additionally, in terms of FCF margins, the reverse DFC model implies an average 24.8% forward FCF margin, lower compared to our forecasts of 39.4%.Gross and EBIT MarginsCompany Data, Khaveen InvestmentsEarnings & Margins2014201520162017201820192020202120222023TTM5-year AverageGross Margin55.51%56.11%58.80%59.93%61.21%61.99%63.31%64.93%56.93%72.72%75.29%66.6%EBIT Margin16.21%17.52%28.03%33.05%32.47%26.07%28.31%37.31%20.68%54.12%59.85%40.05%Click to enlargeSource: Company Data, Khaveen InvestmentsBased on the earnings and margins chart above, our derived average forward EBIT margin based on the reverse DCF model (41.6%) corresponds the closest to the company’s historical EBIT margin in 2021 (37.31%). In comparison, our projected EBIT margin (56.2%) is closer to the company’s historical margin in 2023 (54.12%).Therefore, we analyzed the specific differences between the company’s margins in 2021 and improvement in 2023. Firstly, in terms of gross margins, the company’s gross margins improved from 64.3% in 2021 to 72.72% in 2023 which indicates it benefited from economies of scale and contributed to its EBIT margin increase. Also, we analyzed in our previous analysis one main reason for the decline in margins in 2022 was due to inventory provisions which had “impacted its gross margins by 7.5%” because of “the slump in the GPU market as its shipments fell by 48%” that year, but expected it to be non-recurring as the GPU market improved beyond that.Nvidia20192020202120222023AverageEmployee Headcount13,77518,97522,47326,19629,600Growth %37.7%18.4%16.6%13.0%21.4%SG&A ($ mln)1,0931,9122,1662,4402,654Growth %74.9%13.3%12.7%8.8%27.4%SG&A % of Revenue10.01%11.47%8.05%9.05%4.36%R&D ($ mln)2,8293,9245,2687,3398,675Growth %38.7%34.3%39.3%18.2%32.6%R&D % of Revenue25.91%23.53%19.57%27.21%14.24%Click to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, another factor in the increased margins is lower growth in SG&A and R&D expenses. As stated by management, the increase in R&D as well as SG&A for fiscal year 2023 “was primarily driven by increased compensation and employee growth”. We compared the employee growth of Nvidia with its SG&A and R&D expense growth. As seen in the table, the company’s SG&A expense growth has been lower than employee growth and revenue growth between 2021 to 2023, leading to lower SG&A % of revenue from 8.05% to 4.36%. We believe this could be due to the company’s business model with an ecosystem of partners including a network of cloud providers, PC & server makers, and distributors, allowing the company to depend on its established partner ecosystems to increase sales rather than requiring to scale its direct sales force.On the other hand, its R&D expenses growth had been higher than employee growth over the period. However, its R&D expenses growth had been lower than revenue growth, leading to a decline of R&D % of Revenue from 19.57% in 2021 to 14.24% in 2023. We believe the reason for this is related to its business model, as the company is a chip designer. It designs main chip architectures such as Blackwell and focuses on developments to improve its chipset architectures; thus we believe its business model primarily requires better-skilled employees and talent which the company could attract by increasing its compensation, explaining the higher expense growth compared to employee growth.Overall, we believe the company could at least sustain its margins around its historical 2023 levels, by maintaining its level of economies of scale as its sales capacity is much higher compared to 2021. Additionally, we expect its operating expenses (R&D and SG&A) % of Revenue to be maintained due to its business model. We believe the company’s partner ecosystem is more established compared to 2021 as it has expanded partnerships with key cloud partners as well as management highlighted in its recent earnings briefing that “Blackwell will be available in over 100 OEM and ODM systems at launch, more than double the number of Hopper's launch”. Furthermore, we believe its increased compensation levels could indicate its ability to attract and retain better-skilled employees compared to 2021.FCF MarginsCompany Data, Khaveen InvestmentsEarnings & Margins2014201520162017201820192020202120222023TTM5-yr AvgFree Cash Flow Margin (Capex Only)17.05%21.86%21.70%29.88%26.30%38.22%28.75%30.82%14.10%43.56%48.49%33.1%Adjusted CapEx/Revenue2.6%1.7%2.5%6.1%5.1%4.5%6.8%3.6%6.8%1.8%1.5%4.1%Adjusted CapEx/Fixed Assets8.2%6.5%13.5%29.9%21.9%13.5%8.9%6.4%10.1%5.0%5.1%7.1%Click to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, the reverse DCF model average forward FCF margins (24.8%) are closer to the company’s historical FCF margins in 2020 (28.75%). In comparison, our projected forward average FCF margin (39.4%) is higher and more aligned with its 2023 FCF margin (43.56%). The improvement of the company’s FCF margin is mainly due to the rise in its EBIT margin as explained above from 2021 to 2023 (16.8%). Furthermore, another factor for the increase in FCF margins is due to its higher EBIT margins as explained above as well as lower capex intensity. From the table above, its capex % of revenue and fixed assets declined in 2023 and TTM to its lowest levels over the period which we believe is due to the lean operating business model of Nvidia as a fabless chipmaker with minimal capex requirements to support revenue growth, depending on foundry partners such as TSMC.Forward MarginsOverall, the reverse DCF model margins are lower compared to our projected margins in terms of both EBIT and FCF margins. The reverse DCF EBIT average forward margins (41.6%) are in line with the company’s historical 2021 margin levels, while our projected margins are closer to its 2023 margins. We believe our margin assumptions are more appropriate as the company’s EBIT margin has improved between 2021 to 2023 due to improved economies of scale with higher gross margins as well as its lower operating expenses including SG&A and R&D due to its business model depending on its established partner ecosystem for sales and its R&D activities as a chip designer. Furthermore, we expect its higher sales capacity and improved partner ecosystem and enhanced R&D capabilities to sustain its current margin levels going forward; thus we believe our forecasted margins to be more appropriate. Additionally, we highlighted the improved EBIT margins supporting its FCF, which bodes well for its FCF margins.Risk: Growth OutlookAmong the 3 factors analyzed, we believe our assumptions are appropriate compared to the reversed DCF model. However, we believe revenue growth could be a risk due to competitive factors as AMD is expected to release more details for its upcoming launch of its MI350X, and data center customers invest in their chip development which leads us to await further details on their performance capabilities to determine whether they could be formidable rivals to Nvidia. Based on our projections previously derived based on market growth and competitive factor for Nvidia, the competitive factor contributes 21% of growth for its Data Center segment. Further, Nvidia faces geopolitical risks such as in China with the imposition of sanctions on sales to Chinese chipmakers, which could affect its competitiveness in that market. China accounted for 17% of its total revenues in FY2024.ValuationKhaveen InvestmentsWe maintain the same assumption for our valuation from our previous analysis, as we have thoroughly justified the appropriateness in this analysis but with a lower discount rate of 13.5% (company’s WACC). This includes revenue growth (57.1%), EV/EBITDA based on US-only chipmakers (27.78x), average forward EBIT (56.2%), and FCF margin (39.4%) and derived an upside of 8.84%.VerdictWe believe our 5-year forward average revenue growth projections for Nvidia are appropriate, albeit slightly higher than our market-implied growth assumption (44.8% vs 41.2%), driven by the execution of its product roadmap with new products including Blackwell supporting its competitiveness. Furthermore, we believe Nvidia's strong partnerships with major cloud providers further could contribute to sustained growth. In terms of the terminal value, we believe our EV/EBITDA assumption of 27.78x, based on the US-only average for chipmakers, is more appropriate than the reverse DCF model-derived value, which aligns with the overall semiconductor average. The US-only average is the lowest compared to Logic Chipmaker, High Growth, and Nvidia's historical averages, making our assumption relatively conservative. Finally, we believe our higher margin projections compared to the reverse DCF are more appropriate, reflecting Nvidia's improved economies of scale, higher gross margins, and lower operating expenses. Also, we expect its higher sales capacity, robust partner ecosystem, and advanced R&D capabilities to sustain these margins and positively contribute to its robust FCFs. However, Nvidia’s share price has rocketed by 43% in the past month and 58% since our last coverage, meeting our price target while overtaking Apple and Microsoft as the most valuable company. Therefore, we believe its current valuation is appropriate, and we have updated our latest price target of $147.57 (14% higher than $129.71 previously mainly due to a lower discount rate) indicates limited upside in the near term of 8.84% based on our current conservative assumptions; thus we now downgrade it as a Hold.","news_type":1},"isVote":1,"tweetType":1,"viewCount":197,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":319017830928560,"gmtCreate":1718898647144,"gmtModify":1718901358394,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"I didn't read this and I still bought the stock! MOOOOON&nbsp;[Miser]&nbsp;&nbsp;","listText":"I didn't read this and I still bought the stock! MOOOOON&nbsp;[Miser]&nbsp;&nbsp;","text":"I didn't read this and I still bought the stock! MOOOOON [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319017830928560","repostId":"2444055984","repostType":2,"repost":{"id":"2444055984","kind":"highlight","pubTimestamp":1718894170,"share":"https://ttm.financial/m/news/2444055984?lang=&edition=fundamental","pubTime":"2024-06-20 22:36","market":"fut","language":"en","title":"Nvidia: The Paper Gains Need To Be Converted To Cash","url":"https://stock-news.laohu8.com/highlight/detail?id=2444055984","media":"seekingalpha","summary":"Nvidia stock has been rising due to the retail investor excitement about the stock split.At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble.Furth","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia stock has been rising due to the retail investor excitement about the stock split.</p></li><li><p>At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble.</p></li><li><p>Further, the macro environment is deteriorating, with recession risks rising, which should negatively affect a cyclical company like Nvidia.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e266fe86c663b9c3cdda0b5f8e602dc7\" alt=\"jetcityimage\" title=\"jetcityimage\" tg-width=\"750\" tg-height=\"500\"/><span>jetcityimage</span></p><h2 id=\"id_844493039\">NVDA is not a long-term buy and hold</h2><p>Investors who bought Nvidia (NASDAQ:NVDA) stock last year or even recently this year have significant paper gains, as NVDA is up 174% YTD, and an astonishing 3547% over the last 5 years. Nvidia is now $3.33T market cap company, the largest company by market cap in the world.</p><p>Here is the NVDA chart.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e8db7fdae785a966b2c8b7e35d93a443\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"424\"/><span>Data by YCharts</span></p><p>However, NVDA is not a long-term buy and hold stock at this point, as I will explain in this article, and thus the investors who currently own NVDA with hefty paper capital gains have to eventually convert these paper gains into cash - they have to sell Nvidia.</p><p>Otherwise, depending on the timing of the purchase and the average purchase price, these paper gains are likely to significantly shrink, or potentially turn into paper losses.</p><p>Specifically, as I will explain, NVDA stock is likely in a bubble based on valuations, and thus the bubble will eventually burst. It&#39;s correct that NVDA had an amazing sales growth over the last 12 months, but NVDA sales are heavily concentrated in only two customers, the mysterious Customer A and Customer B, and this is a major risk to future sales growth if one of these customers pulls back. Most importantly, the NVDA sales growth is expected to significantly slow down, even not assuming the risk associated with the concentrated sales, and assuming that the broad economy will not enter a recession.</p><p>Thus, NVDA is currently valued as if the growth over the last 12 months will continue indefinitely, which is an irrational assumption. The economy is slowing down, slipping towards a recession, which means that the demand from Customers A and B will slow down, and the broad demand for NVDA chips will also slow down, likely producing negative YOY sales growth over the next few quarters. The semiconductor market is cyclical, and the GenAI theme will prove to be cyclical as well.</p><h2 id=\"id_2378348616\">Technical considerations</h2><p>First, let&#39;s look at the technical considerations, since the bubbles are irrational by definition, dominated by the positive feedback traders or trend followers who buy strictly based on charts.</p><p>On March 8, NVDA had a sharp intraday reversal, which in-fact pointed to the potential top, and the March 8 price was the peak - until the NVDA Q1 earnings announcement and the stock split announcement, which triggered another leg higher.</p><p>The stock split does not have any fundamental significance, and yet, NVDA continued to spike higher after the stock split announcement. The retail investor was particularly excited about the stock split. In my opinion, this is the key marking of the top.</p><p>On March 11th, I wrote that NVDA was potentially topping, based on technical analysis, and assigned the HOLD rating, to evaluate the price pattern. Obviously, March 8 was not the top. The price did correct below the 50dma, but rebounded strongly after the stock split.</p><p>Technically, there is no indication that NVDA is at the top now - the price keeps climbing, as the chart below shows.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7ce414244ee67aa3c097427efdddfac8\" alt=\"Barchart\" title=\"Barchart\" tg-width=\"640\" tg-height=\"350\"/><span>Barchart</span></p><h2 id=\"id_1855740321\">Fundamental considerations</h2><p>With respect to valuation, it&#39;s widely known that NVDA is extremely expensive.</p><ul style=\"\"><li><p>GAAP PE ttm is at 76</p></li><li><p>forward GAAP PE is at 56</p></li><li><p>PS ratio is at 40</p></li></ul><p>These are very expensive valuations. Broadcom (AVGO) is the closest peer, and it similarly overvalued based on PE ratios, but significantly cheaper based on PS ratio at 19, which points that NVDA&#39;s profit margins are unsustainably high.</p><p>In fact, NVDA has EBIT margins of around 60%, which will be difficult to maintain, as the demand for its chips slows and the competition in the sector heats up, and this points to slower earnings growth.</p><p>High valuations can be justified if sales growth is expected to continue to be very high. However, the sales growth is slowing. Here is the fact, NVDA had 18% revenue growth QoQ for FY25 Q1, where the total revenue was $26B. NVDA guides that FY25 Q2 total revenue will be $28B, which is only 7.7% QoQ growth. Thus, the revenue growth is slowing.</p><p>Thus, you have a situation where the profit margins are unsustainably high, and where the revenue growth is slowing. The combination of these two variables is negative for earnings growth.</p><p>In addition, NVDA has a very concentrated sales with only two customers representing 24% of the total revenue. Here is the warning from the recent NVDA 10Q statement:</p><blockquote><p>Sales to one direct customer, Customer A, represented 13% of total revenue and sales to a second direct customer, Customer B, represented 11% of total revenue for the first quarter of fiscal year 2025, both of which were attributable to the Compute &amp; Networking segment. There was no direct customer that represented 10% or more of total revenue for the first quarter of fiscal year 2024.</p></blockquote><h2 id=\"id_3506160230\">Macro considerations</h2><p>None of the assumptions above assumes that the US economy could significantly slow, and potentially slip into a recession. The semiconductor industry is highly cyclical and the potential recession could have a negative effect on NVDA sales.</p><p>Based on the recent data, the US economy is slowing, and slipping towards a recession. Yet, NVDA stock keeps climbing.</p><h2 id=\"id_3271725306\">Implications</h2><p>Here are the facts.</p><ul style=\"\"><li><p>The NVDA stock is very expensive, based on the valuation multiples.</p></li><li><p>Yet, the revenue growth rate is slowing.</p></li><li><p>The macro environment is deteriorating, the recession risks are rising.</p></li></ul><p>In this situation, where the macro risks and the firm-specific risks are rising, while the price is also rising fueled by the retail investor excitement about the stock split, it makes sense to consider converting the paper gains to cash.</p><p>Now, bear in mind that trading around the bubble is very difficult. Isaac Newton got burned trading around the South Sea Bubble. He took the profit in the South Sea stock, but the stock kept climbing, so he got back near the top. As the price kept falling, he kept buying the &#34;dip&#34;, yet the price kept falling. He lost most of his fortune and proclaimed:</p><blockquote><p>I can calculate the motions of the heavenly bodies, but not the madness of the people.</p></blockquote></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: The Paper Gains Need To Be Converted To Cash</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: The Paper Gains Need To Be Converted To Cash\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-20 22:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4699997-nvidia-the-paper-gains-need-to-be-converted-to-cash><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia stock has been rising due to the retail investor excitement about the stock split.At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble....</p>\n\n<a href=\"https://seekingalpha.com/article/4699997-nvidia-the-paper-gains-need-to-be-converted-to-cash\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4592":"伊斯兰概念","BK4532":"文艺复兴科技持仓","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0238689110.USD":"贝莱德环球动力股票基金","LU0234570918.USD":"高盛全球核心股票组合Acc Close","BK4566":"资本集团","BK4575":"芯片概念","LU0072462426.USD":"贝莱德全球配置 A2","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0056508442.USD":"贝莱德世界科技基金A2","BK4543":"AI","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0080751232.USD":"富达环球多元动力基金A","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","LU0061474960.USD":"天利环球焦点基金AU Acc","NVDA":"英伟达","BK4141":"半导体产品","BK4588":"碎股","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","BK4503":"景林资产持仓","IE00B19Z9P08.USD":"LEGG MASON CLEARBRIDGE US AGGRESSIVE GROWTH \"A\" (USD) INC","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4581":"高盛持仓","IE00B19Z9Z06.USD":"Legg Mason ClearBridge - US Aggressive Growth A Acc USD","BK4512":"苹果概念","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0979878070.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"A\" (USD) ACC","LU1670711040.USD":"M&G (LUX) GLOBAL DIVIDEND \"A\" (USD) ACC","BK4548":"巴美列捷福持仓","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU0965509283.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (SGDHDG) INC","LU0861579265.USD":"联博低波幅策略股票基金A","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","LU0444971666.USD":"天利全球科技基金","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","BK4554":"元宇宙及AR概念"},"source_url":"https://seekingalpha.com/article/4699997-nvidia-the-paper-gains-need-to-be-converted-to-cash","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2444055984","content_text":"Nvidia stock has been rising due to the retail investor excitement about the stock split.At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble.Further, the macro environment is deteriorating, with recession risks rising, which should negatively affect a cyclical company like Nvidia.jetcityimageNVDA is not a long-term buy and holdInvestors who bought Nvidia (NASDAQ:NVDA) stock last year or even recently this year have significant paper gains, as NVDA is up 174% YTD, and an astonishing 3547% over the last 5 years. Nvidia is now $3.33T market cap company, the largest company by market cap in the world.Here is the NVDA chart.Data by YChartsHowever, NVDA is not a long-term buy and hold stock at this point, as I will explain in this article, and thus the investors who currently own NVDA with hefty paper capital gains have to eventually convert these paper gains into cash - they have to sell Nvidia.Otherwise, depending on the timing of the purchase and the average purchase price, these paper gains are likely to significantly shrink, or potentially turn into paper losses.Specifically, as I will explain, NVDA stock is likely in a bubble based on valuations, and thus the bubble will eventually burst. It's correct that NVDA had an amazing sales growth over the last 12 months, but NVDA sales are heavily concentrated in only two customers, the mysterious Customer A and Customer B, and this is a major risk to future sales growth if one of these customers pulls back. Most importantly, the NVDA sales growth is expected to significantly slow down, even not assuming the risk associated with the concentrated sales, and assuming that the broad economy will not enter a recession.Thus, NVDA is currently valued as if the growth over the last 12 months will continue indefinitely, which is an irrational assumption. The economy is slowing down, slipping towards a recession, which means that the demand from Customers A and B will slow down, and the broad demand for NVDA chips will also slow down, likely producing negative YOY sales growth over the next few quarters. The semiconductor market is cyclical, and the GenAI theme will prove to be cyclical as well.Technical considerationsFirst, let's look at the technical considerations, since the bubbles are irrational by definition, dominated by the positive feedback traders or trend followers who buy strictly based on charts.On March 8, NVDA had a sharp intraday reversal, which in-fact pointed to the potential top, and the March 8 price was the peak - until the NVDA Q1 earnings announcement and the stock split announcement, which triggered another leg higher.The stock split does not have any fundamental significance, and yet, NVDA continued to spike higher after the stock split announcement. The retail investor was particularly excited about the stock split. In my opinion, this is the key marking of the top.On March 11th, I wrote that NVDA was potentially topping, based on technical analysis, and assigned the HOLD rating, to evaluate the price pattern. Obviously, March 8 was not the top. The price did correct below the 50dma, but rebounded strongly after the stock split.Technically, there is no indication that NVDA is at the top now - the price keeps climbing, as the chart below shows.BarchartFundamental considerationsWith respect to valuation, it's widely known that NVDA is extremely expensive.GAAP PE ttm is at 76forward GAAP PE is at 56PS ratio is at 40These are very expensive valuations. Broadcom (AVGO) is the closest peer, and it similarly overvalued based on PE ratios, but significantly cheaper based on PS ratio at 19, which points that NVDA's profit margins are unsustainably high.In fact, NVDA has EBIT margins of around 60%, which will be difficult to maintain, as the demand for its chips slows and the competition in the sector heats up, and this points to slower earnings growth.High valuations can be justified if sales growth is expected to continue to be very high. However, the sales growth is slowing. Here is the fact, NVDA had 18% revenue growth QoQ for FY25 Q1, where the total revenue was $26B. NVDA guides that FY25 Q2 total revenue will be $28B, which is only 7.7% QoQ growth. Thus, the revenue growth is slowing.Thus, you have a situation where the profit margins are unsustainably high, and where the revenue growth is slowing. The combination of these two variables is negative for earnings growth.In addition, NVDA has a very concentrated sales with only two customers representing 24% of the total revenue. Here is the warning from the recent NVDA 10Q statement:Sales to one direct customer, Customer A, represented 13% of total revenue and sales to a second direct customer, Customer B, represented 11% of total revenue for the first quarter of fiscal year 2025, both of which were attributable to the Compute & Networking segment. There was no direct customer that represented 10% or more of total revenue for the first quarter of fiscal year 2024.Macro considerationsNone of the assumptions above assumes that the US economy could significantly slow, and potentially slip into a recession. The semiconductor industry is highly cyclical and the potential recession could have a negative effect on NVDA sales.Based on the recent data, the US economy is slowing, and slipping towards a recession. Yet, NVDA stock keeps climbing.ImplicationsHere are the facts.The NVDA stock is very expensive, based on the valuation multiples.Yet, the revenue growth rate is slowing.The macro environment is deteriorating, the recession risks are rising.In this situation, where the macro risks and the firm-specific risks are rising, while the price is also rising fueled by the retail investor excitement about the stock split, it makes sense to consider converting the paper gains to cash.Now, bear in mind that trading around the bubble is very difficult. Isaac Newton got burned trading around the South Sea Bubble. He took the profit in the South Sea stock, but the stock kept climbing, so he got back near the top. As the price kept falling, he kept buying the \"dip\", yet the price kept falling. He lost most of his fortune and proclaimed:I can calculate the motions of the heavenly bodies, but not the madness of the people.","news_type":1},"isVote":1,"tweetType":1,"viewCount":174,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":319297429459000,"gmtCreate":1718982410279,"gmtModify":1718983006395,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"Hold so you can buy? I bought more!","listText":"Hold so you can buy? I bought more!","text":"Hold so you can buy? I bought more!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319297429459000","repostId":"2445878967","repostType":2,"repost":{"id":"2445878967","kind":"highlight","pubTimestamp":1718981439,"share":"https://ttm.financial/m/news/2445878967?lang=&edition=fundamental","pubTime":"2024-06-21 22:50","market":"us","language":"en","title":"Nvidia: We're Not Ready To Reach For This High Flier","url":"https://stock-news.laohu8.com/highlight/detail?id=2445878967","media":"seekingalpha","summary":"NVIDIA is a premier AI-driven growth story in the semiconductor space, expanding beyond GPUs to AI, VR, and HPC.Despite strong financial performance, its shares are priced to perfection and uncertain ","content":"<html><head></head><body><ul style=\"\"><li><p>NVIDIA is a premier AI-driven growth story in the semiconductor space, expanding beyond GPUs to AI, VR, and HPC.</p></li><li><p>Despite strong financial performance, its shares are priced to perfection and uncertain remains about the long-term growth potential in its key markets.</p></li><li><p>We rate NVDA a Hold based on its super-premium valuation, though we acknowledge that fundamentals are on the company&#39;s side.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" alt=\"BING-JHEN HONG\" title=\"BING-JHEN HONG\" tg-width=\"750\" tg-height=\"500\"/><span>BING-JHEN HONG</span></p><h2 id=\"id_2237748591\">Summary</h2><p>At this point, <a href=\"https://laohu8.com/S/NVDA\">NVIDIA</a> needs no introduction. We are largely value-oriented investors and tend to stay away from situations with tremendous hype and high-flying valuations. But, alas, we&#39;re biting.</p><p>NVIDIA invented the graphics processing unit (&#34;GPU&#34;), hardware originally geared towards serving as the graphics engine in PCs. It has recently extended the application of its GPUs to AI, VR, and high-performance computing (&#34;HPC&#34;). It is also building a platform strategy around connecting its hardware, system software, programmable algorithms, libraries, systems, and services to add value in its key markets (i.e., gaming, automotive, datacenter (&#34;DC&#34;), professional visualization, PC OEMs, and embedded applications). It is undoubtedly the premier AI-driven growth story within the semiconductor space, and, arguably, the broader tech industry.</p><p>Despite its dominant position and unprecedented recent financial performance, we feel it prudent to wait this one out, and give the shares a Hold. We see the shares as priced to perfection and the long-term growth potential of critical end-markets (i.e., AI/ML, VR, and automotive) as untested and uncertain. We acknowledge that these markets are almost certainly going to be fast growers for the foreseeable future, but questions remain about the sustainability of the current pace of growth.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a98749c868c7d63ddccfb277b181f4fc\" alt=\"NVDA Share Price (1Y) (CapIQ)\" title=\"NVDA Share Price (1Y) (CapIQ)\" tg-width=\"640\" tg-height=\"180\"/><span>NVDA Share Price (1Y) (CapIQ)</span></p><h2 id=\"id_2795078279\">Earnings Update</h2><h3 id=\"id_1548565247\">Datacenters</h3><p>In the FQ1, NVDA posted DC revenue of ~$22.6Bn, +23% QoQ and +427% YoY, exceeding the Street&#39;s expectations. The bulk of this result was attributable to DC compute revenues of ~$19.4Bn, which grew 29% QoQ (478% YoY), while networking revenue of ~$3.2Bn <em>declined</em> 5% QoQ (still +242% YoY).</p><p>Management noted that these results were driven by strong demand for its HGX platform due to the aggressive ramp of Training and Inference for LLM and GenAI infrastructure. While all customer segments contributed to the segment&#39;s growth, it was led by Enterprise &amp; Consumer Internet companies with large cloud platforms (n.b., these customers represent ~40% of DC revenues).</p><p>NVDA is sampling H200 in Q1 and is on track to begin shipments in Q2. Its supply for H100s grew, though it continues to be constrained for H200. Blackwell is in full production, with its ramp expected to start in Q3, which would enable material revenues to be realized this year from the launch. Overall, demand for H200s and Blackwell remains well ahead of the available supply, a trend that is expected to persist. Following the official debut of Blackwell, management noted that it had lined up availability at &gt;100 OEM and ODM for its launch (n.b., +2x Hopper at the time of this product&#39;s introduction).</p><p>Within networking, results were largely driven by InfiniBand, though this business was modestly weaker in the quarter due to the timing of supply, while demand remained well above capacity. Management noted that its initial shipments of the Spectrum-X product line (Ethernet) are expected to open a new market for the company and could be a multi-billion-dollar product within a year. The segment is expected to return to sequential growth in Q2.</p><h3 id=\"id_3276516466\">Gaming</h3><p>Gaming revenues (~$2.6Bn) declined ~8% QoQ, but were up 18% YoY, driven by strong consumer demand for the GeForce RTX GPUs. Management noted it sees channel inventory levels normalizing and expects a return to sequential growth for the next quarter. The ProVis segment ($427MM revenue) declined ~8% QoQ, but was up 45% YoY. Desktop workstation GPU sales were weak, though management noted a normalization of channel inventory levels.</p><h3 id=\"id_4015388383\">Auto &amp; Embedded</h3><p>Auto &amp; Embedded revenues grew 17% QoQ and 11% YoY, driven by the continued adoption of its self-driving platforms. Management noted increased adoption of its products by BYD, XPENG, GAC&#39;s AION Hyper Nuro, and others for the DRIVE Thor platform, which now features Blackwell GPU architecture. Lucid and IM Motors are also reportedly using DRIVE Orin to power their automated driving systems.</p><p>Timing the mass adoption of this technology is incredibly difficult, if not impossible, though we believe NVDA is positioned as a leader in the space and a likely beneficiary if it plays out.</p><h2 id=\"id_2948685063\">Valuation</h2><p>Our base case $115 price target (n.b., ~15% implied downside) is based on a ~36x P/E on our 2026E EPS estimate of $32/share (see table below). We believe NVDA deserves a premium multiple, given its strong competitive positioning for DC growth driven by cloud and AI, gaming, autonomous vehicles, and an expanding ecosystem of products and applications (n.b., NVDA 3-year revenue CAGR through the LTM period is ~61% vs ~26% for AMD).</p><p>Our bull case price target of $135 is based on higher 2026E earnings driven by greater DC and AI GPU demand as enterprises find new AI use-cases to justify their spend and continued market share dominance. Other products serving automotive could offer additional support.</p><p>Our bear case price target of $82.5 is based on a reduction in earnings growth momentum as customers integrate and digest their significant GPU investments, souring investor sentiment as competitive pressure from AMD mounts.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8aad690d49b5458d8c5b5a7b615e3bae\" alt=\"Base Case EPS Forecast (Empyrean)\" title=\"Base Case EPS Forecast (Empyrean)\" tg-width=\"489\" tg-height=\"528\"/><span>Base Case EPS Forecast (Empyrean)</span></p><h2 id=\"id_3116957681\">Risks &amp; Catalysts</h2><p>We see 4 key risks facing NVDA:</p><h3 id=\"id_412165149\">Premium Valuation</h3><p>NVDA trades at a premium multiple to its peers. If growth were to slow, its multiple could revert closer to peers, negatively affecting its share price</p><h3 id=\"id_880772906\">Early-Stage Growth Cycle &amp; Competitive Threats</h3><p>NVDA’s future growth is dependent on early-stage tech trends in its DC and automotive businesses. Increasing competition in these applications could slow its growth prospects. For example, at the recent Computex 2024 event, AMD provided an update on its Instinct accelerator roadmap, which contemplates an acceleration of product in the cadence of product introductions to once per year, following NVDA’s move (n.b., previous cycle was 2 years). AMD’s next accelerator, the MI325X, which is expected to become available in Q4 &#39;24, will have increased memory capacity (n.b., 288GB for HBM3e vs. 141GB for NVDA&#39;s H200) and memory bandwidth (n.b., 6TB/s vs. H200 at 4.8TB/s). Following the MI325X, AMD expects to launch the MI350 series in 2025. The MI350 series is expected to provide a ~35x increase in AI inference performance, and will be positioned to compete against NVDA’s B-Series platforms. And in &#39;26, AMD is expected to launch the MI400 series, which will be based on its next-gen CDNA architecture, “Next”, to compete against NVDA’s recently announced R-Series platforms.</p><h3 id=\"id_2298763083\">Changing Consumer Preferences in Gaming</h3><p>The gaming segment could be affected by changing consumer preferences. If NVDA were to fall out of favor with gamers, its business could be affected.</p><h3 id=\"id_1104877048\">Cyclicality</h3><p>The semiconductor industry is well known for boom/bust inventory cycles. A macro-driven inventory correction could have material negative implications for NVDA.</p><p>Given the nature of the risks described above, we see little room for these to move in a favorable direction to become positive catalysts. For example, to cast the premium valuation risk as a positive catalyst, one would have to underwrite further multiple expansion - something which seems highly speculative at this point.</p><h2 id=\"id_3741322798\">Conclusion</h2><p>While we acknowledge that price momentum and fundamentals favor NVDA, we believe the stock’s valuation is reasonably fair. Given our conservative investment philosophy, we are rating the shares a Hold.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: We're Not Ready To Reach For This High Flier</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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We are largely value-oriented investors and tend to stay away from situations with tremendous hype and high-flying valuations. But, alas, we're biting.NVIDIA invented the graphics processing unit (\"GPU\"), hardware originally geared towards serving as the graphics engine in PCs. It has recently extended the application of its GPUs to AI, VR, and high-performance computing (\"HPC\"). It is also building a platform strategy around connecting its hardware, system software, programmable algorithms, libraries, systems, and services to add value in its key markets (i.e., gaming, automotive, datacenter (\"DC\"), professional visualization, PC OEMs, and embedded applications). It is undoubtedly the premier AI-driven growth story within the semiconductor space, and, arguably, the broader tech industry.Despite its dominant position and unprecedented recent financial performance, we feel it prudent to wait this one out, and give the shares a Hold. We see the shares as priced to perfection and the long-term growth potential of critical end-markets (i.e., AI/ML, VR, and automotive) as untested and uncertain. We acknowledge that these markets are almost certainly going to be fast growers for the foreseeable future, but questions remain about the sustainability of the current pace of growth.NVDA Share Price (1Y) (CapIQ)Earnings UpdateDatacentersIn the FQ1, NVDA posted DC revenue of ~$22.6Bn, +23% QoQ and +427% YoY, exceeding the Street's expectations. The bulk of this result was attributable to DC compute revenues of ~$19.4Bn, which grew 29% QoQ (478% YoY), while networking revenue of ~$3.2Bn declined 5% QoQ (still +242% YoY).Management noted that these results were driven by strong demand for its HGX platform due to the aggressive ramp of Training and Inference for LLM and GenAI infrastructure. While all customer segments contributed to the segment's growth, it was led by Enterprise & Consumer Internet companies with large cloud platforms (n.b., these customers represent ~40% of DC revenues).NVDA is sampling H200 in Q1 and is on track to begin shipments in Q2. Its supply for H100s grew, though it continues to be constrained for H200. Blackwell is in full production, with its ramp expected to start in Q3, which would enable material revenues to be realized this year from the launch. Overall, demand for H200s and Blackwell remains well ahead of the available supply, a trend that is expected to persist. Following the official debut of Blackwell, management noted that it had lined up availability at >100 OEM and ODM for its launch (n.b., +2x Hopper at the time of this product's introduction).Within networking, results were largely driven by InfiniBand, though this business was modestly weaker in the quarter due to the timing of supply, while demand remained well above capacity. Management noted that its initial shipments of the Spectrum-X product line (Ethernet) are expected to open a new market for the company and could be a multi-billion-dollar product within a year. The segment is expected to return to sequential growth in Q2.GamingGaming revenues (~$2.6Bn) declined ~8% QoQ, but were up 18% YoY, driven by strong consumer demand for the GeForce RTX GPUs. Management noted it sees channel inventory levels normalizing and expects a return to sequential growth for the next quarter. The ProVis segment ($427MM revenue) declined ~8% QoQ, but was up 45% YoY. Desktop workstation GPU sales were weak, though management noted a normalization of channel inventory levels.Auto & EmbeddedAuto & Embedded revenues grew 17% QoQ and 11% YoY, driven by the continued adoption of its self-driving platforms. Management noted increased adoption of its products by BYD, XPENG, GAC's AION Hyper Nuro, and others for the DRIVE Thor platform, which now features Blackwell GPU architecture. Lucid and IM Motors are also reportedly using DRIVE Orin to power their automated driving systems.Timing the mass adoption of this technology is incredibly difficult, if not impossible, though we believe NVDA is positioned as a leader in the space and a likely beneficiary if it plays out.ValuationOur base case $115 price target (n.b., ~15% implied downside) is based on a ~36x P/E on our 2026E EPS estimate of $32/share (see table below). We believe NVDA deserves a premium multiple, given its strong competitive positioning for DC growth driven by cloud and AI, gaming, autonomous vehicles, and an expanding ecosystem of products and applications (n.b., NVDA 3-year revenue CAGR through the LTM period is ~61% vs ~26% for AMD).Our bull case price target of $135 is based on higher 2026E earnings driven by greater DC and AI GPU demand as enterprises find new AI use-cases to justify their spend and continued market share dominance. Other products serving automotive could offer additional support.Our bear case price target of $82.5 is based on a reduction in earnings growth momentum as customers integrate and digest their significant GPU investments, souring investor sentiment as competitive pressure from AMD mounts.Base Case EPS Forecast (Empyrean)Risks & CatalystsWe see 4 key risks facing NVDA:Premium ValuationNVDA trades at a premium multiple to its peers. If growth were to slow, its multiple could revert closer to peers, negatively affecting its share priceEarly-Stage Growth Cycle & Competitive ThreatsNVDA’s future growth is dependent on early-stage tech trends in its DC and automotive businesses. Increasing competition in these applications could slow its growth prospects. For example, at the recent Computex 2024 event, AMD provided an update on its Instinct accelerator roadmap, which contemplates an acceleration of product in the cadence of product introductions to once per year, following NVDA’s move (n.b., previous cycle was 2 years). AMD’s next accelerator, the MI325X, which is expected to become available in Q4 '24, will have increased memory capacity (n.b., 288GB for HBM3e vs. 141GB for NVDA's H200) and memory bandwidth (n.b., 6TB/s vs. H200 at 4.8TB/s). Following the MI325X, AMD expects to launch the MI350 series in 2025. The MI350 series is expected to provide a ~35x increase in AI inference performance, and will be positioned to compete against NVDA’s B-Series platforms. And in '26, AMD is expected to launch the MI400 series, which will be based on its next-gen CDNA architecture, “Next”, to compete against NVDA’s recently announced R-Series platforms.Changing Consumer Preferences in GamingThe gaming segment could be affected by changing consumer preferences. If NVDA were to fall out of favor with gamers, its business could be affected.CyclicalityThe semiconductor industry is well known for boom/bust inventory cycles. A macro-driven inventory correction could have material negative implications for NVDA.Given the nature of the risks described above, we see little room for these to move in a favorable direction to become positive catalysts. For example, to cast the premium valuation risk as a positive catalyst, one would have to underwrite further multiple expansion - something which seems highly speculative at this point.ConclusionWhile we acknowledge that price momentum and fundamentals favor NVDA, we believe the stock’s valuation is reasonably fair. Given our conservative investment philosophy, we are rating the shares a Hold.","news_type":1},"isVote":1,"tweetType":1,"viewCount":301,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":319017830928560,"gmtCreate":1718898647144,"gmtModify":1718901358394,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"I didn't read this and I still bought the stock! MOOOOON&nbsp;[Miser]&nbsp;&nbsp;","listText":"I didn't read this and I still bought the stock! MOOOOON&nbsp;[Miser]&nbsp;&nbsp;","text":"I didn't read this and I still bought the stock! MOOOOON [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319017830928560","repostId":"2444055984","repostType":2,"repost":{"id":"2444055984","kind":"highlight","pubTimestamp":1718894170,"share":"https://ttm.financial/m/news/2444055984?lang=&edition=fundamental","pubTime":"2024-06-20 22:36","market":"fut","language":"en","title":"Nvidia: The Paper Gains Need To Be Converted To Cash","url":"https://stock-news.laohu8.com/highlight/detail?id=2444055984","media":"seekingalpha","summary":"Nvidia stock has been rising due to the retail investor excitement about the stock split.At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble.Furth","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia stock has been rising due to the retail investor excitement about the stock split.</p></li><li><p>At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble.</p></li><li><p>Further, the macro environment is deteriorating, with recession risks rising, which should negatively affect a cyclical company like Nvidia.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e266fe86c663b9c3cdda0b5f8e602dc7\" alt=\"jetcityimage\" title=\"jetcityimage\" tg-width=\"750\" tg-height=\"500\"/><span>jetcityimage</span></p><h2 id=\"id_844493039\">NVDA is not a long-term buy and hold</h2><p>Investors who bought Nvidia (NASDAQ:NVDA) stock last year or even recently this year have significant paper gains, as NVDA is up 174% YTD, and an astonishing 3547% over the last 5 years. Nvidia is now $3.33T market cap company, the largest company by market cap in the world.</p><p>Here is the NVDA chart.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e8db7fdae785a966b2c8b7e35d93a443\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"424\"/><span>Data by YCharts</span></p><p>However, NVDA is not a long-term buy and hold stock at this point, as I will explain in this article, and thus the investors who currently own NVDA with hefty paper capital gains have to eventually convert these paper gains into cash - they have to sell Nvidia.</p><p>Otherwise, depending on the timing of the purchase and the average purchase price, these paper gains are likely to significantly shrink, or potentially turn into paper losses.</p><p>Specifically, as I will explain, NVDA stock is likely in a bubble based on valuations, and thus the bubble will eventually burst. It&#39;s correct that NVDA had an amazing sales growth over the last 12 months, but NVDA sales are heavily concentrated in only two customers, the mysterious Customer A and Customer B, and this is a major risk to future sales growth if one of these customers pulls back. Most importantly, the NVDA sales growth is expected to significantly slow down, even not assuming the risk associated with the concentrated sales, and assuming that the broad economy will not enter a recession.</p><p>Thus, NVDA is currently valued as if the growth over the last 12 months will continue indefinitely, which is an irrational assumption. The economy is slowing down, slipping towards a recession, which means that the demand from Customers A and B will slow down, and the broad demand for NVDA chips will also slow down, likely producing negative YOY sales growth over the next few quarters. The semiconductor market is cyclical, and the GenAI theme will prove to be cyclical as well.</p><h2 id=\"id_2378348616\">Technical considerations</h2><p>First, let&#39;s look at the technical considerations, since the bubbles are irrational by definition, dominated by the positive feedback traders or trend followers who buy strictly based on charts.</p><p>On March 8, NVDA had a sharp intraday reversal, which in-fact pointed to the potential top, and the March 8 price was the peak - until the NVDA Q1 earnings announcement and the stock split announcement, which triggered another leg higher.</p><p>The stock split does not have any fundamental significance, and yet, NVDA continued to spike higher after the stock split announcement. The retail investor was particularly excited about the stock split. In my opinion, this is the key marking of the top.</p><p>On March 11th, I wrote that NVDA was potentially topping, based on technical analysis, and assigned the HOLD rating, to evaluate the price pattern. Obviously, March 8 was not the top. The price did correct below the 50dma, but rebounded strongly after the stock split.</p><p>Technically, there is no indication that NVDA is at the top now - the price keeps climbing, as the chart below shows.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7ce414244ee67aa3c097427efdddfac8\" alt=\"Barchart\" title=\"Barchart\" tg-width=\"640\" tg-height=\"350\"/><span>Barchart</span></p><h2 id=\"id_1855740321\">Fundamental considerations</h2><p>With respect to valuation, it&#39;s widely known that NVDA is extremely expensive.</p><ul style=\"\"><li><p>GAAP PE ttm is at 76</p></li><li><p>forward GAAP PE is at 56</p></li><li><p>PS ratio is at 40</p></li></ul><p>These are very expensive valuations. Broadcom (AVGO) is the closest peer, and it similarly overvalued based on PE ratios, but significantly cheaper based on PS ratio at 19, which points that NVDA&#39;s profit margins are unsustainably high.</p><p>In fact, NVDA has EBIT margins of around 60%, which will be difficult to maintain, as the demand for its chips slows and the competition in the sector heats up, and this points to slower earnings growth.</p><p>High valuations can be justified if sales growth is expected to continue to be very high. However, the sales growth is slowing. Here is the fact, NVDA had 18% revenue growth QoQ for FY25 Q1, where the total revenue was $26B. NVDA guides that FY25 Q2 total revenue will be $28B, which is only 7.7% QoQ growth. Thus, the revenue growth is slowing.</p><p>Thus, you have a situation where the profit margins are unsustainably high, and where the revenue growth is slowing. The combination of these two variables is negative for earnings growth.</p><p>In addition, NVDA has a very concentrated sales with only two customers representing 24% of the total revenue. Here is the warning from the recent NVDA 10Q statement:</p><blockquote><p>Sales to one direct customer, Customer A, represented 13% of total revenue and sales to a second direct customer, Customer B, represented 11% of total revenue for the first quarter of fiscal year 2025, both of which were attributable to the Compute &amp; Networking segment. There was no direct customer that represented 10% or more of total revenue for the first quarter of fiscal year 2024.</p></blockquote><h2 id=\"id_3506160230\">Macro considerations</h2><p>None of the assumptions above assumes that the US economy could significantly slow, and potentially slip into a recession. The semiconductor industry is highly cyclical and the potential recession could have a negative effect on NVDA sales.</p><p>Based on the recent data, the US economy is slowing, and slipping towards a recession. Yet, NVDA stock keeps climbing.</p><h2 id=\"id_3271725306\">Implications</h2><p>Here are the facts.</p><ul style=\"\"><li><p>The NVDA stock is very expensive, based on the valuation multiples.</p></li><li><p>Yet, the revenue growth rate is slowing.</p></li><li><p>The macro environment is deteriorating, the recession risks are rising.</p></li></ul><p>In this situation, where the macro risks and the firm-specific risks are rising, while the price is also rising fueled by the retail investor excitement about the stock split, it makes sense to consider converting the paper gains to cash.</p><p>Now, bear in mind that trading around the bubble is very difficult. Isaac Newton got burned trading around the South Sea Bubble. He took the profit in the South Sea stock, but the stock kept climbing, so he got back near the top. As the price kept falling, he kept buying the &#34;dip&#34;, yet the price kept falling. He lost most of his fortune and proclaimed:</p><blockquote><p>I can calculate the motions of the heavenly bodies, but not the madness of the people.</p></blockquote></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: The Paper Gains Need To Be Converted To Cash</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: The Paper Gains Need To Be Converted To Cash\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-20 22:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4699997-nvidia-the-paper-gains-need-to-be-converted-to-cash><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia stock has been rising due to the retail investor excitement about the stock split.At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble....</p>\n\n<a href=\"https://seekingalpha.com/article/4699997-nvidia-the-paper-gains-need-to-be-converted-to-cash\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4592":"伊斯兰概念","BK4532":"文艺复兴科技持仓","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0238689110.USD":"贝莱德环球动力股票基金","LU0234570918.USD":"高盛全球核心股票组合Acc Close","BK4566":"资本集团","BK4575":"芯片概念","LU0072462426.USD":"贝莱德全球配置 A2","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0056508442.USD":"贝莱德世界科技基金A2","BK4543":"AI","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0080751232.USD":"富达环球多元动力基金A","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","LU0061474960.USD":"天利环球焦点基金AU Acc","NVDA":"英伟达","BK4141":"半导体产品","BK4588":"碎股","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","BK4503":"景林资产持仓","IE00B19Z9P08.USD":"LEGG MASON CLEARBRIDGE US AGGRESSIVE GROWTH \"A\" (USD) INC","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4581":"高盛持仓","IE00B19Z9Z06.USD":"Legg Mason ClearBridge - US Aggressive Growth A Acc USD","BK4512":"苹果概念","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0979878070.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"A\" (USD) ACC","LU1670711040.USD":"M&G (LUX) GLOBAL DIVIDEND \"A\" (USD) ACC","BK4548":"巴美列捷福持仓","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU0965509283.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (SGDHDG) INC","LU0861579265.USD":"联博低波幅策略股票基金A","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","LU0444971666.USD":"天利全球科技基金","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","BK4554":"元宇宙及AR概念"},"source_url":"https://seekingalpha.com/article/4699997-nvidia-the-paper-gains-need-to-be-converted-to-cash","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2444055984","content_text":"Nvidia stock has been rising due to the retail investor excitement about the stock split.At the same time, the sales growth is expected to slow, while the valuation multiples point to the bubble.Further, the macro environment is deteriorating, with recession risks rising, which should negatively affect a cyclical company like Nvidia.jetcityimageNVDA is not a long-term buy and holdInvestors who bought Nvidia (NASDAQ:NVDA) stock last year or even recently this year have significant paper gains, as NVDA is up 174% YTD, and an astonishing 3547% over the last 5 years. Nvidia is now $3.33T market cap company, the largest company by market cap in the world.Here is the NVDA chart.Data by YChartsHowever, NVDA is not a long-term buy and hold stock at this point, as I will explain in this article, and thus the investors who currently own NVDA with hefty paper capital gains have to eventually convert these paper gains into cash - they have to sell Nvidia.Otherwise, depending on the timing of the purchase and the average purchase price, these paper gains are likely to significantly shrink, or potentially turn into paper losses.Specifically, as I will explain, NVDA stock is likely in a bubble based on valuations, and thus the bubble will eventually burst. It's correct that NVDA had an amazing sales growth over the last 12 months, but NVDA sales are heavily concentrated in only two customers, the mysterious Customer A and Customer B, and this is a major risk to future sales growth if one of these customers pulls back. Most importantly, the NVDA sales growth is expected to significantly slow down, even not assuming the risk associated with the concentrated sales, and assuming that the broad economy will not enter a recession.Thus, NVDA is currently valued as if the growth over the last 12 months will continue indefinitely, which is an irrational assumption. The economy is slowing down, slipping towards a recession, which means that the demand from Customers A and B will slow down, and the broad demand for NVDA chips will also slow down, likely producing negative YOY sales growth over the next few quarters. The semiconductor market is cyclical, and the GenAI theme will prove to be cyclical as well.Technical considerationsFirst, let's look at the technical considerations, since the bubbles are irrational by definition, dominated by the positive feedback traders or trend followers who buy strictly based on charts.On March 8, NVDA had a sharp intraday reversal, which in-fact pointed to the potential top, and the March 8 price was the peak - until the NVDA Q1 earnings announcement and the stock split announcement, which triggered another leg higher.The stock split does not have any fundamental significance, and yet, NVDA continued to spike higher after the stock split announcement. The retail investor was particularly excited about the stock split. In my opinion, this is the key marking of the top.On March 11th, I wrote that NVDA was potentially topping, based on technical analysis, and assigned the HOLD rating, to evaluate the price pattern. Obviously, March 8 was not the top. The price did correct below the 50dma, but rebounded strongly after the stock split.Technically, there is no indication that NVDA is at the top now - the price keeps climbing, as the chart below shows.BarchartFundamental considerationsWith respect to valuation, it's widely known that NVDA is extremely expensive.GAAP PE ttm is at 76forward GAAP PE is at 56PS ratio is at 40These are very expensive valuations. Broadcom (AVGO) is the closest peer, and it similarly overvalued based on PE ratios, but significantly cheaper based on PS ratio at 19, which points that NVDA's profit margins are unsustainably high.In fact, NVDA has EBIT margins of around 60%, which will be difficult to maintain, as the demand for its chips slows and the competition in the sector heats up, and this points to slower earnings growth.High valuations can be justified if sales growth is expected to continue to be very high. However, the sales growth is slowing. Here is the fact, NVDA had 18% revenue growth QoQ for FY25 Q1, where the total revenue was $26B. NVDA guides that FY25 Q2 total revenue will be $28B, which is only 7.7% QoQ growth. Thus, the revenue growth is slowing.Thus, you have a situation where the profit margins are unsustainably high, and where the revenue growth is slowing. The combination of these two variables is negative for earnings growth.In addition, NVDA has a very concentrated sales with only two customers representing 24% of the total revenue. Here is the warning from the recent NVDA 10Q statement:Sales to one direct customer, Customer A, represented 13% of total revenue and sales to a second direct customer, Customer B, represented 11% of total revenue for the first quarter of fiscal year 2025, both of which were attributable to the Compute & Networking segment. There was no direct customer that represented 10% or more of total revenue for the first quarter of fiscal year 2024.Macro considerationsNone of the assumptions above assumes that the US economy could significantly slow, and potentially slip into a recession. The semiconductor industry is highly cyclical and the potential recession could have a negative effect on NVDA sales.Based on the recent data, the US economy is slowing, and slipping towards a recession. Yet, NVDA stock keeps climbing.ImplicationsHere are the facts.The NVDA stock is very expensive, based on the valuation multiples.Yet, the revenue growth rate is slowing.The macro environment is deteriorating, the recession risks are rising.In this situation, where the macro risks and the firm-specific risks are rising, while the price is also rising fueled by the retail investor excitement about the stock split, it makes sense to consider converting the paper gains to cash.Now, bear in mind that trading around the bubble is very difficult. Isaac Newton got burned trading around the South Sea Bubble. He took the profit in the South Sea stock, but the stock kept climbing, so he got back near the top. As the price kept falling, he kept buying the \"dip\", yet the price kept falling. He lost most of his fortune and proclaimed:I can calculate the motions of the heavenly bodies, but not the madness of the people.","news_type":1},"isVote":1,"tweetType":1,"viewCount":174,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":319019704955056,"gmtCreate":1718899104670,"gmtModify":1718901358385,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"Too long didn't read; I bought more!&nbsp;[Miser]&nbsp;&nbsp;","listText":"Too long didn't read; I bought more!&nbsp;[Miser]&nbsp;&nbsp;","text":"Too long didn't read; I bought more! [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/319019704955056","repostId":"2444429849","repostType":2,"repost":{"id":"2444429849","kind":"highlight","pubTimestamp":1718853852,"share":"https://ttm.financial/m/news/2444429849?lang=&edition=fundamental","pubTime":"2024-06-20 11:24","market":"sg","language":"en","title":"Nvidia: Valuation Seems Reasonable After Recent Rally","url":"https://stock-news.laohu8.com/highlight/detail?id=2444429849","media":"seekingalpha","summary":"Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.We use a Reverse DCF model to obtain the market-impli","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.</p></li><li><p>We use a Reverse DCF model to obtain the market-implied assumptions of the company&#39;s growth rate, terminal value multiples, and profit margins and compare them against our own assumptions.</p></li><li><p>We believe the company&#39;s Blackwell architecture launch and expanded cloud partnerships with major providers contribute to its competitiveness and growth outlook.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" tg-width=\"750\" tg-height=\"500\"/></p><p>BING-JHEN HONG</p><p></p><p>In our previous analysis of NVIDIA Corporation (NASDAQ:NVDA) (NEOE:NVDA:CA), we highlighted the strong performance of Nvidia’s growth of 126% in CY2023, and we remained positive on Nvidia’s Data Center segment, supported by cloud partnerships and sovereign AI initiatives. For 2024, we projected a 58% overall revenue growth, led by the Data Center, with contributions from Gaming, Professional Visualization, and a recovery in PC GPU revenue, as well as 20.6% growth in the Automotive segment.</p><p>Since our last analysis in March, we started reviewing Nvidia again as its share price had risen by 28% in May, with a further upside of 18.3% left based on our previous price target of <em>$1,294.14 ($129.41 post-stock split). </em>Therefore, we initially aimed to determine whether our expectations for Nvidia’s upside were justified. Since then, Nvidia has overtaken both Apple and Microsoft as the largest company globally by market cap, rising by a further 30% and meeting our price target. Firstly, we conducted a reverse DCF analysis determining the market implied revenue growth forecast, terminal value multiple, and profitability margins. Based on that, we compared the reverse DCF model with our revenue, terminal value and margin assumptions and determined whether our assumptions were appropriate.</p><h2 id=\"id_1356393531\">Sustainable Revenue Growth</h2><p>Firstly, we examined whether our revenue growth forecast is appropriate. Based on the reverse DCF model, holding all previous assumptions constant, we derived the market-implied revenue growth rate for Nvidia based on the current market price.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0ce46a7a6e946a7995df8c13ad343a0e\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Revenue Comparison ($ mln)</strong></p></td><td style=\"text-align:left;\"><p><strong>2024F</strong></p></td><td style=\"text-align:left;\"><p><strong>2025F</strong></p></td><td style=\"text-align:left;\"><p><strong>2026F</strong></p></td><td style=\"text-align:left;\"><p><strong>2027F</strong></p></td><td style=\"text-align:left;\"><p><strong>2028F</strong></p></td><td style=\"text-align:left;\"><p><strong>2029F</strong></p></td><td style=\"text-align:left;\"><p><strong>2030F</strong></p></td><td style=\"text-align:left;\"><p><strong>2031F</strong></p></td><td style=\"text-align:left;\"><p><strong>2032F</strong></p></td><td style=\"text-align:left;\"><p><strong>2033F</strong></p></td><td style=\"text-align:left;\"><p><strong>Avr. (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>Avr. (10-yr)</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue (Reverse DCF)</p></td><td style=\"text-align:left;\"><p>113,185</p></td><td style=\"text-align:left;\"><p>163,293</p></td><td style=\"text-align:left;\"><p>220,004</p></td><td style=\"text-align:left;\"><p>273,487</p></td><td style=\"text-align:left;\"><p>320,027</p></td><td style=\"text-align:left;\"><p>358,148</p></td><td style=\"text-align:left;\"><p>388,012</p></td><td style=\"text-align:left;\"><p>410,660</p></td><td style=\"text-align:left;\"><p>427,439</p></td><td style=\"text-align:left;\"><p>439,664</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue Growth</p></td><td style=\"text-align:left;\"><p>85.8%</p></td><td style=\"text-align:left;\"><p>44.3%</p></td><td style=\"text-align:left;\"><p>34.7%</p></td><td style=\"text-align:left;\"><p>24.3%</p></td><td style=\"text-align:left;\"><p>17.0%</p></td><td style=\"text-align:left;\"><p>11.9%</p></td><td style=\"text-align:left;\"><p>8.3%</p></td><td style=\"text-align:left;\"><p>5.8%</p></td><td style=\"text-align:left;\"><p>4.1%</p></td><td style=\"text-align:left;\"><p>2.9%</p></td><td style=\"text-align:left;\"><p>41.2%</p></td><td style=\"text-align:left;\"><p>23.9%</p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue (Our Previous Forecast)</p></td><td style=\"text-align:left;\"><p>95,720</p></td><td style=\"text-align:left;\"><p>148,848</p></td><td style=\"text-align:left;\"><p>225,273</p></td><td style=\"text-align:left;\"><p>306,238</p></td><td style=\"text-align:left;\"><p>383,284</p></td><td style=\"text-align:left;\"><p>450,785</p></td><td style=\"text-align:left;\"><p>506,357</p></td><td style=\"text-align:left;\"><p>550,053</p></td><td style=\"text-align:left;\"><p>583,280</p></td><td style=\"text-align:left;\"><p>607,943</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Revenue Growth</p></td><td style=\"text-align:left;\"><p>57.1%</p></td><td style=\"text-align:left;\"><p>55.5%</p></td><td style=\"text-align:left;\"><p>51.3%</p></td><td style=\"text-align:left;\"><p>35.9%</p></td><td style=\"text-align:left;\"><p>25.2%</p></td><td style=\"text-align:left;\"><p>17.6%</p></td><td style=\"text-align:left;\"><p>12.3%</p></td><td style=\"text-align:left;\"><p>8.6%</p></td><td style=\"text-align:left;\"><p>6.0%</p></td><td style=\"text-align:left;\"><p>4.2%</p></td><td style=\"text-align:left;\"><p>45.0%</p></td><td style=\"text-align:left;\"><p>27.4%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the reverse DCF model, we derived the revenue growth rate at a forward average of 41.2% in the next 5 years, compared to our average forward growth forecast of 44.8%. Furthermore, we derived a 10-year forward growth of 23.9% from the reverse DCF model, compared to 27.4% from our projections. Therefore, this indicates our revenue growth assumption is higher compared to the calculated growth rate from the reverse DCF model. In our previous analysis, we highlighted that we maintained a more stable long-term growth projection “derived independently based on individual segment projections and modeling” for the company “driven primarily due to its Data Center segment at a forward average of 60.9% underpinned by its AI leadership”.</p><p>We examined the latest developments of the company which could support its growth outlook below, including its product launch of its Blackwell architecture, expanded partnerships, and competition.</p><h3 id=\"id_3707924856\">Competitiveness (Blackwell Launch)</h3><p>Nvidia announced the next-gen Blackwell architecture in March 2024, claiming that it enhances computing and generative AI by providing improvements in scale, performance, and efficiency, with customer data centers planned to be operational by Q4 2024. The Blackwell-architecture GPUs are “manufactured using a custom-built 4NP TSMC process” with 208 bln transistors. Previously, we had highlighted the company’s Blackwell architecture based on the company’s provided roadmap in 2024; thus, we believe this indicates its execution on its continued product launches for Data Center.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Category</strong></p></td><td style=\"text-align:left;\"><p><strong>H100</strong></p></td><td style=\"text-align:left;\"><p><strong>H200</strong></p></td><td style=\"text-align:left;\"><p><strong>B100</strong></p></td><td style=\"text-align:left;\"><p><strong>B200</strong></p></td><td style=\"text-align:left;\"><p><strong>GB200 Superchip</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Price</p></td><td style=\"text-align:left;\"><p>$24,000</p></td><td style=\"text-align:left;\"><p>$24,000</p></td><td style=\"text-align:left;\"><p>$30,000</p></td><td style=\"text-align:left;\"><p>$30,000-$40,000</p></td><td style=\"text-align:left;\"><p>$60,000-$70,000</p></td></tr><tr><td style=\"text-align:left;\"><p>Increase %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>25.0%</p></td><td style=\"text-align:left;\"><p>16.7%</p></td><td style=\"text-align:left;\"><p>85.7%</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Capacity (GB)</p></td><td style=\"text-align:left;\"><p>80.00</p></td><td style=\"text-align:left;\"><p>141.00</p></td><td style=\"text-align:left;\"><p>192.00</p></td><td style=\"text-align:left;\"><p>192.00</p></td><td style=\"text-align:left;\"><p>384.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Bandwidth (GB/s)</p></td><td style=\"text-align:left;\"><p>3,352.00</p></td><td style=\"text-align:left;\"><p>4,800.00</p></td><td style=\"text-align:left;\"><p>8,000.00</p></td><td style=\"text-align:left;\"><p>8,000.00</p></td><td style=\"text-align:left;\"><p>16,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>43.2%</p></td><td style=\"text-align:left;\"><p>66.7%</p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>100.0%</p></td></tr><tr><td style=\"text-align:left;\"><p>TF32 (Teraflops)</p></td><td style=\"text-align:left;\"><p>495.00</p></td><td style=\"text-align:left;\"><p>495.00</p></td><td style=\"text-align:left;\"><p>900.00</p></td><td style=\"text-align:left;\"><p>1,100.00</p></td><td style=\"text-align:left;\"><p>2,500.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>81.8%</p></td><td style=\"text-align:left;\"><p>22.2%</p></td><td style=\"text-align:left;\"><p>127.3%</p></td></tr><tr><td style=\"text-align:left;\"><p>FP16 (Teraflops)</p></td><td style=\"text-align:left;\"><p>989.00</p></td><td style=\"text-align:left;\"><p>989.00</p></td><td style=\"text-align:left;\"><p>1,750.00</p></td><td style=\"text-align:left;\"><p>2,250.00</p></td><td style=\"text-align:left;\"><p>5,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>76.9%</p></td><td style=\"text-align:left;\"><p>28.6%</p></td><td style=\"text-align:left;\"><p>122.2%</p></td></tr><tr><td style=\"text-align:left;\"><p>FP8 (Teraflops)</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>3,500.00</p></td><td style=\"text-align:left;\"><p>4,500.00</p></td><td style=\"text-align:left;\"><p>10,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>76.9%</p></td><td style=\"text-align:left;\"><p>28.6%</p></td><td style=\"text-align:left;\"><p>122.2%</p></td></tr><tr><td style=\"text-align:left;\"><p>FP4 (Teraflops)</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>1,979.00</p></td><td style=\"text-align:left;\"><p>7,000.00</p></td><td style=\"text-align:left;\"><p>9,000.00</p></td><td style=\"text-align:left;\"><p>20,000.00</p></td></tr><tr><td style=\"text-align:left;\"><p>Improvement %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>0.0%</p></td><td style=\"text-align:left;\"><p>253.7%</p></td><td style=\"text-align:left;\"><p>28.6%</p></td><td style=\"text-align:left;\"><p>122.2%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>According to the above table comparing the GPUs across Nvidia’s portfolio, the Blackwell chips (B100 and B200) show increasing capabilities including memory capacity, memory bandwidth, and improvements in floating-point performance metrics which play important roles in deep learning model training, as well as higher pricing compared to the Hopper chips (H100 and H200).</p><p>Additionally, the GB200 Superchip which consists of two Blackwell GPUs and one Grace CPU, is reported to have a price range of $60,000-$70,000, along with doubled memory capacity and bandwidth in comparison to previous gen B200 and more than 100% of improvements in the above listed floating-point performance metrics for deep learning model training.</p><p>Furthermore, we updated our comparison of the top data center GPU chips of Nvidia with its top competitors. Besides Nvidia, AMD (AMD) is expected to launch its new MI350 chip this year and Intel’s (INTC) new Gaudi 3 is expected to be released in Q2. Furthermore, Nvidia highlighted competition in China from Huawei which is expected to release its new and improved Ascend 910B chip this year as well following its Ascend 910 introduction in 2019.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Data Center GPU Comparison Metrics</strong></p></td><td style=\"text-align:left;\"><p><strong>AMD (MI300x)</strong></p></td><td style=\"text-align:left;\"><p><strong>AMD (MI350)</strong></p></td><td style=\"text-align:left;\"><p>Nvidia (B100)</p></td><td style=\"text-align:left;\"><p><strong>Nvidia (GB200 Superchip)</strong></p></td><td style=\"text-align:left;\"><p><strong>Intel (Gaudi 2)</strong></p></td><td style=\"text-align:left;\"><p>Intel (Gaudi 3)</p></td><td style=\"text-align:left;\"><p>Huawei (Ascend 910B)</p></td></tr><tr><td style=\"text-align:left;\"><p>Processor</p></td><td style=\"text-align:left;\"><p>5nm (TSMC)</p></td><td style=\"text-align:left;\"><p>4nm (TSMC)</p></td><td style=\"text-align:left;\"><p>4nm (TSMC)</p></td><td style=\"text-align:left;\"><p>4nm (TSMC)</p></td><td style=\"text-align:left;\"><p>7nm (TSMC)</p></td><td style=\"text-align:left;\"><p>5nm (TSMC)</p></td><td style=\"text-align:left;\"><p>7nm</p></td></tr><tr><td style=\"text-align:left;\"><p>Transistors (&#39;bln&#39;)</p></td><td style=\"text-align:left;\"><p>153</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>208</p></td><td style=\"text-align:left;\"><p>208</p></td><td style=\"text-align:left;\"><p>&gt;100</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>-</p></td></tr><tr><td style=\"text-align:left;\"><p>FP16 Peak (Teraflops)</p></td><td style=\"text-align:left;\"><p>1,532</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>3,500</p></td><td style=\"text-align:left;\"><p>10,000</p></td><td style=\"text-align:left;\"><p>839</p></td><td style=\"text-align:left;\"><p>1,835</p></td><td style=\"text-align:left;\"><p>320</p></td></tr><tr><td style=\"text-align:left;\"><p>INT 8 (Teraflops)</p></td><td style=\"text-align:left;\"><p>3,064</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>7,000</p></td><td style=\"text-align:left;\"><p>40,000</p></td><td style=\"text-align:left;\"><p>1,628</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>640</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Clock</p></td><td style=\"text-align:left;\"><p>1.9GHz</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>8Gbps HBM3E</p></td><td style=\"text-align:left;\"><p>8Gbps HBM3E</p></td><td style=\"text-align:left;\"><p>1.56GHz</p></td><td style=\"text-align:left;\"><p>3.6GHz</p></td><td style=\"text-align:left;\"><p>-</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Capacity</p></td><td style=\"text-align:left;\"><p>192GB</p></td><td style=\"text-align:left;\"><p>288GB</p></td><td style=\"text-align:left;\"><p>192GB</p></td><td style=\"text-align:left;\"><p>384GB</p></td><td style=\"text-align:left;\"><p>96GB</p></td><td style=\"text-align:left;\"><p>128GB</p></td><td style=\"text-align:left;\"><p>64GB</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory Bandwidth</p></td><td style=\"text-align:left;\"><p>5.2TB/sec</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>8TB/sec</p></td><td style=\"text-align:left;\"><p>16TB/sec</p></td><td style=\"text-align:left;\"><p>2.45TB/sec</p></td><td style=\"text-align:left;\"><p>3.7TB/sec</p></td><td style=\"text-align:left;\"><p>-</p></td></tr><tr><td style=\"text-align:left;\"><p>Interconnect Bandwidth</p></td><td style=\"text-align:left;\"><p>896 GB/sec</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>1800GB/s</p></td><td style=\"text-align:left;\"><p>1800GB/s</p></td><td style=\"text-align:left;\"><p>300GB/s</p></td><td style=\"text-align:left;\"><p>600GB/s</p></td><td style=\"text-align:left;\"><p>400G/s</p></td></tr><tr><td style=\"text-align:left;\"><p>Max Power Consumption</p></td><td style=\"text-align:left;\"><p>700W</p></td><td style=\"text-align:left;\"><p>-</p></td><td style=\"text-align:left;\"><p>700W</p></td><td style=\"text-align:left;\"><p>1000W</p></td><td style=\"text-align:left;\"><p>600W</p></td><td style=\"text-align:left;\"><p>900W</p></td><td style=\"text-align:left;\"><p>310W</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the table, Nvidia’s Blackwell chips show superior performance capabilities, especially GB200 Superchip which stands out with its 4nm processor, highest transistor counts at 208 bln, and exceptional FP16 and INT8 peak performance metrics, 10,000 teraflops and 40,000 teraflops, respectively. It also offers the largest memory capacity of 384GB and the highest memory bandwidth at 16TB/sec, although it comes with the highest power consumption of 1000W.</p><p>In contrast, AMD has yet to provide details on its MI350 product with limited information about it besides its 4nm process and 288Gb memory capacity, which is lower than the Nvidia GB200. The previous AMD MI300x was built on a 5nm process, providing 1,532 teraflops of FP16 and 3,064 teraflops of INT8 performance with a memory capacity of 192GB and bandwidth of 5.2TB/sec, consuming 700W.</p><p>Furthermore, Intel Gaudi 3 also uses 5nm technology, with 1,835 teraflops FP16 and 128GB memory but has a higher power consumption of 900W. Notably, the Huawei Ascend 910B, although using older 7nm technology, has the lowest power consumption of 310W.</p><p>Overall, our forward average revenue growth rate projections (45%) are higher compared to the market implied growth rate through the reverse DCF model (41.2%), a difference of 3.8% which we expect due to the company’s enhanced competitiveness. For example, we believe the improvements in Nvidia’s data center GPU capabilities with Blackwell highlight the company’s execution of its product roadmap and commitment to future product launches, which could cement its competitiveness.</p><h3 id=\"id_1140507\">Partnerships</h3><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Company</strong></p></td><td style=\"text-align:left;\"><p><strong>Purpose of Adoption of Blackwell</strong></p></td><td style=\"text-align:left;\"><p><strong>Cloud Market Share</strong></p></td><td style=\"text-align:left;\"><p><strong>Avr. Revenue Growth (3-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>Cloud Revenue ($ bln)</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>AWS</p></td><td style=\"text-align:left;\"><p>To securely build and run large AI models on AWS</p></td><td style=\"text-align:left;\"><p>34%</p></td><td style=\"text-align:left;\"><p>26.4%</p></td><td style=\"text-align:left;\"><p>90.76</p></td></tr><tr><td style=\"text-align:left;\"><p>Google Cloud</p></td><td style=\"text-align:left;\"><p>To enable Google Cloud with advanced AI and data analytics capabilities</p></td><td style=\"text-align:left;\"><p>12%</p></td><td style=\"text-align:left;\"><p>37.7%</p></td><td style=\"text-align:left;\"><p>33.09</p></td></tr><tr><td style=\"text-align:left;\"><p>Microsoft</p></td><td style=\"text-align:left;\"><p>To boost Microsoft Azure&#39;s capabilities regarding large-scale AI workloads handling</p></td><td style=\"text-align:left;\"><p>26%</p></td><td style=\"text-align:left;\"><p>38.8%</p></td><td style=\"text-align:left;\"><p>70.20</p></td></tr><tr><td style=\"text-align:left;\"><p>Oracle</p></td><td style=\"text-align:left;\"><p>To enhance Oracle&#39;s AI model capabilities for faster and higher efficiency of data processing and AI training</p></td><td style=\"text-align:left;\"><p>2%</p></td><td style=\"text-align:left;\"><p>30.2%</p></td><td style=\"text-align:left;\"><p>5.70</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Along with the launch of NVIDIA’s Grace Blackwell GPU platform, its cloud partners including AWS (AMZN), Google (GOOG), Microsoft (MSFT), and Oracle (ORCL) announced plans for adoption. Firstly, AWS will “offer the NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs” and enhance the performance of its AI models with Nvidia’s Grace Blackwell GPU and DGX Cloud. Similarly, Google Cloud claims future adoption of the Grace Blackwell platform to its “AI Hypercomputer architecture in two configurations”, while also focusing on the development of trillion-parameter language models. Microsoft aims to improve its AI infrastructure with the integration of Grace Blackwell GB200 with Microsoft Azure. Oracle also plans on adopting Nvidia’s Grace Blackwell platform across its OCI Supercluster and OCI Compute, aiming to improve performance and efficiency for AI workloads such as LLM inference.</p><p>Based on the table above, we believe these expanded partnerships with AWS, Google, Microsoft, and Oracle are significant for Nvidia as these major cloud providers purchase and use Nvidia’s chips. They account for 74% of the global cloud market share combined and have robust growth averages of between 26.4% to 38.8%. Furthermore, according to UBS (UBS), Microsoft is believed to be its largest customer with 19% of revenues last year.</p><p>Overall, we believe the expanded partnerships of Nvidia with the major cloud providers market share combined bodes well for the sustainability of its growth outlook, which is reflected in our projections as we forecasted its forward 3-year growth rate of around 54% on average compared to the reverse DCF model growth which tapers down significantly from 86% to 35% in the next 3 years, as we expect the company’s growth to continue to be sustained by the adoption of upcoming products such as Blackwell.</p><h3 id=\"id_2518720661\">Current Development of CSPs With Their Own AI Chips</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/955260cbea0325acfd8958c6dcb2006b\" tg-width=\"640\" tg-height=\"335\"/></p><p>TrendForce</p><p></p><p>However, according to TrendForce, several cloud service providers such as Microsoft and Google have also been developing their respective AI chip technologies recently. For instance, Microsoft is currently in the process of developing their “in-house AI chip Azure Maia 100” and Cobalt 100, which we covered in our previous analysis. Along with Google’s recent development of its tensor processing unit (TPU) of v5e, which is particularly designed for training large AI models. Despite that, Google stated it will provide the optionality for customers to use Google TPUs and Nvidia’s Blackwell GPUs. Additionally, other major companies such as Tesla, Meta, and OpenAI are also pursuing their own respective development regarding AI accelerator chips.</p><p>Therefore, as competition heats up against Nvidia from key competitors, we believe our projections fairly incorporated this as we tapered down its growth rate beyond 2026. Additionally, while the development of custom AI chips by its cloud customers could affect the company’s growth, we believe Nvidia has an advantage as these companies are not specialized in chip design. While these companies have higher total company absolute R&amp;D expenses than Microsoft, Amazon, and Google, they predominantly focus across the Software &amp; Services (Microsoft), Consumer Discretionary Distribution &amp; Retail (Amazon), and Media &amp; Entertainment industries (Google). Therefore, in comparison, Nvidia is more specialized as it focuses on Semiconductors, enhancing its competitiveness with improved capabilities over competition, including custom chips from cloud providers. For example, in our analysis of Microsoft, we highlighted Microsoft’s Maia 100 GPU trailing behind Nvidia’s H100 chip specifications as it uses older process technology (5nm) and has memory capacity and bandwidth. Furthermore, the Maia 100 would lag behind compared to Nvidia’s B100 chips with an even wider gap as the B100 has twice the number of transistors and 3x higher memory capacity and bandwidth than the Maia 100. Furthermore, we also highlighted the focus on cost as a rationale for custom chip development by cloud providers, such as Microsoft emphasizing Maia enabling cheaper models for customers and “to diversify and provide choices to customers” rather than replacing Nvidia’s high-performance GPUs as well as Amazon highlighting its low-cost AI inference enabled by Inferentia2.</p><h3 id=\"id_2945945714\">Forward Growth</h3><p>Overall, our revenue growth projections (44.8%) are higher compared to the calculated market implied revenue growth of the company (41.2%), but we believe it is appropriate given factors such as the enhanced competitiveness of Nvidia and execution on its product roadmap such as with the upcoming Blackwell launch, which we believe cements its competitive positioning against key competitors and custom chip developments by cloud providers, supporting our expectations for the company to continue outperforming the market growth as reflected by our revenue projections. Additionally, our projection which is more sustainable on a 3-year forward average compared to the market implied growth through the reverse DCF which we believe could be supported by the expanded partnerships of major cloud service providers with Nvidia.</p><h2 id=\"id_3227000819\">Determining Appropriate Terminal Value</h2><p>Furthermore, we conducted another reverse DCF analysis, adjusting our model holding all assumptions constant except for our terminal value which is derived based on the EV/EBITDA multiple.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9747b715cab9de5845d3b411e3e0c6d4\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>Terminal Value</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA</strong></p></td></tr><tr><td style=\"text-align:left;\"><p><strong>Reverse DCF</strong></p></td><td style=\"text-align:left;\"><p>8,091,521</p></td><td style=\"text-align:left;\"><p>19.17x</p></td></tr><tr><td style=\"text-align:left;\"><p><strong>Our DCF</strong></p></td><td style=\"text-align:left;\"><p>9,712,487</p></td><td style=\"text-align:left;\"><p>27.78x</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the table, we calculated the Reverse DCF method a terminal value of $8,091 mln with an EV/EBITDA multiple of 19.17x. In comparison, our previous analysis, however, shows a higher terminal value of $9,712 mln and an EV/EBITDA multiple of 27.78x. Previously, we based our terminal value EV/EBITDA on the 5-year US-only chipmaker average of 27.78x.</p><h3 id=\"id_3270132057\">Industry Multiple</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/87bc458d9fc8a868a53e4b313a36d68c\" tg-width=\"640\" tg-height=\"360\"/></p><p>Seeking Alpha, Investing.com, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA and CAGR Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Revenue CAGR</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>US Only</p></td><td style=\"text-align:left;\"><p>27.78x</p></td><td style=\"text-align:left;\"><p>11.70%</p></td></tr><tr><td style=\"text-align:left;\"><p>European Only</p></td><td style=\"text-align:left;\"><p>11.65x</p></td><td style=\"text-align:left;\"><p>13.44%</p></td></tr><tr><td style=\"text-align:left;\"><p>Asian Only</p></td><td style=\"text-align:left;\"><p>8.26x</p></td><td style=\"text-align:left;\"><p>6.99%</p></td></tr><tr><td style=\"text-align:left;\"><p><strong>Overall</strong></p></td><td style=\"text-align:left;\"><p><strong>21.58x</strong></p></td><td style=\"text-align:left;\"><p><strong>11.18%</strong></p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>We compiled the US-only chipmaker EV/EBITDA and compared it with the non-US chipmaker EV/EBITDA above. The overall chipmaker average is 21.58x, closer to our calculated reverse DCF model multiple of 19.17x. However, the US-only chipmakers have a much higher average of 27.78x compared to 9.96x for non-US chipmakers. Thus, this indicates a premium for US-only chipmakers, which we believe is more appropriate for Nvidia’s valuation.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA and CAGR Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Revenue CAGR</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Logic</p></td><td style=\"text-align:left;\"><p>33.14x</p></td><td style=\"text-align:left;\"><p>16.85%</p></td></tr><tr><td style=\"text-align:left;\"><p>DAO</p></td><td style=\"text-align:left;\"><p>19.89x</p></td><td style=\"text-align:left;\"><p>10.98%</p></td></tr><tr><td style=\"text-align:left;\"><p>Memory</p></td><td style=\"text-align:left;\"><p>6.36x</p></td><td style=\"text-align:left;\"><p>-3.66%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, we categorized companies within the industry based on their primary business segments. The logic segment demonstrates the highest multiple of 33.14x along with the highest CAGR of 16.85. On the other hand, the memory segment shows a relatively lower multiple at 6.36x with a negative CAGR of -3.66%. Hence, with the Logic segment’s higher EV/EBITDA, we believe this supports a higher multiple used for Nvidia’s valuation as a Logic chipmaker.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA and CAGR Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EV/EBITDA (5-yr)</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Revenue CAGR</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Higher Growth (20%+)</p></td><td style=\"text-align:left;\"><p>45.80x</p></td><td style=\"text-align:left;\"><p>31.22%</p></td></tr><tr><td style=\"text-align:left;\"><p>Medium Growth (10% to 20%)</p></td><td style=\"text-align:left;\"><p>21.94x</p></td><td style=\"text-align:left;\"><p>11.67%</p></td></tr><tr><td style=\"text-align:left;\"><p>Low Growth (0% to 10%)</p></td><td style=\"text-align:left;\"><p>13.10x</p></td><td style=\"text-align:left;\"><p>4.41%</p></td></tr><tr><td style=\"text-align:left;\"><p>Negative Growth (&lt;0%)</p></td><td style=\"text-align:left;\"><p>8.00x</p></td><td style=\"text-align:left;\"><p>-6.12%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Additionally, we further compiled the above table by stratifying major companies within the industry by their respective growth rates. We observed that companies experiencing higher growth (20%+) hold the highest multiples at 45.80x along with a high CAGR of 31.22%. This contrasts with the companies possessing negative growth (&lt;0%), which are valued at a lower multiple of 8.00x with a CAGR of -6.12%. Thus, this further supports Nvidia’s higher multiple used as it aligns with the high growth category at a CAGR of 49.37%.</p><h3 id=\"id_2193681664\">Company Multiple</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/8d03fd23857db8c07e637debc107c290\" tg-width=\"635\" tg-height=\"439\"/></p><p>YCharts</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Nvidia</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>Average</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>EV/EBITDA</p></td><td style=\"text-align:left;\"><p>42.18x</p></td><td style=\"text-align:left;\"><p>55.91x</p></td><td style=\"text-align:left;\"><p>53.23x</p></td><td style=\"text-align:left;\"><p>80.26x</p></td><td style=\"text-align:left;\"><p>42.19x</p></td><td style=\"text-align:left;\"><p>54.75x</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, we analyzed the company’s historical EV/EBITDA above. The company’s EV/EBITDA has been volatile with a significant spike in 2023 but has moderated since. Its 5-year median multiple shows a rising trend. Its 5-year average is 54.75x, thus using its 5-year average EV/EBITDA would result in a much higher terminal value and valuation of the company compared to our assumption based on the 5-year average US-only chipmakers.</p><h3 id=\"id_2858467795\">Forward Multiple</h3><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>EV/EBITDA Average</strong></p></td><td style=\"text-align:left;\"><p><strong>Multiple</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>US Only</p></td><td style=\"text-align:left;\"><p>27.78x</p></td></tr><tr><td style=\"text-align:left;\"><p>Logic Chipmaker</p></td><td style=\"text-align:left;\"><p>33.14x</p></td></tr><tr><td style=\"text-align:left;\"><p>High Growth</p></td><td style=\"text-align:left;\"><p>45.80x</p></td></tr><tr><td style=\"text-align:left;\"><p>Nvidia Historical</p></td><td style=\"text-align:left;\"><p>54.75x</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Overall, we believe our EV/EBITDA assumption used of 27.78x, based on the US-only average chipmakers, is more appropriate compared to our derived EV/EBITDA based on the reverse DCF model which is more in line with the overall semicon chipmaker average. Furthermore, comparing the average EV/EBITDA in the table summary above, the US-only average has the lowest compared to Logic Chipmaker, High Growth, and Nvidia&#39;s Historical average; thus we believe our assumption is relatively conservative.</p><h2 id=\"id_28603474\">Strong Profit Margins</h2><p>Finally, we conducted the reverse DCF analysis on its profitability margins, holding all other assumptions constant. We adjusted the reverse DCF model to obtain the EBIT and FCF margins based on the current market price.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/fcd2847ba36389af6308a3cbdf5c1810\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Comparison</strong></p></td><td style=\"text-align:left;\"><p><strong>EBIT Margin</strong></p></td><td style=\"text-align:left;\"><p><strong>FCF Margin</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Reverse DCF</p></td><td style=\"text-align:left;\"><p>41.6%</p></td><td style=\"text-align:left;\"><p>24.8%</p></td></tr><tr><td style=\"text-align:left;\"><p>Our Previous Analysis</p></td><td style=\"text-align:left;\"><p>56.2%</p></td><td style=\"text-align:left;\"><p>39.4%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>As seen above, the reverse DCF model calculated an average 5-year forward EBIT margin of 41.6% compared to 56.2% for our assumptions based on our previous analysis. Additionally, in terms of FCF margins, the reverse DFC model implies an average 24.8% forward FCF margin, lower compared to our forecasts of 39.4%.</p><h3 id=\"id_4010505352\">Gross and EBIT Margins</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/15df2ef56f27d9e3522347767415845f\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Earnings &amp; Margins</strong></p></td><td style=\"text-align:left;\"><p><strong>2014</strong></p></td><td style=\"text-align:left;\"><p><strong>2015</strong></p></td><td style=\"text-align:left;\"><p><strong>2016</strong></p></td><td style=\"text-align:left;\"><p><strong>2017</strong></p></td><td style=\"text-align:left;\"><p><strong>2018</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>TTM</strong></p></td><td style=\"text-align:left;\"><p><strong>5-year Average</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Gross Margin</p></td><td style=\"text-align:left;\"><p>55.51%</p></td><td style=\"text-align:left;\"><p>56.11%</p></td><td style=\"text-align:left;\"><p>58.80%</p></td><td style=\"text-align:left;\"><p>59.93%</p></td><td style=\"text-align:left;\"><p>61.21%</p></td><td style=\"text-align:left;\"><p>61.99%</p></td><td style=\"text-align:left;\"><p>63.31%</p></td><td style=\"text-align:left;\"><p>64.93%</p></td><td style=\"text-align:left;\"><p>56.93%</p></td><td style=\"text-align:left;\"><p>72.72%</p></td><td style=\"text-align:left;\"><p>75.29%</p></td><td style=\"text-align:left;\"><p>66.6%</p></td></tr><tr><td style=\"text-align:left;\"><p>EBIT Margin</p></td><td style=\"text-align:left;\"><p>16.21%</p></td><td style=\"text-align:left;\"><p>17.52%</p></td><td style=\"text-align:left;\"><p>28.03%</p></td><td style=\"text-align:left;\"><p>33.05%</p></td><td style=\"text-align:left;\"><p>32.47%</p></td><td style=\"text-align:left;\"><p>26.07%</p></td><td style=\"text-align:left;\"><p>28.31%</p></td><td style=\"text-align:left;\"><p>37.31%</p></td><td style=\"text-align:left;\"><p>20.68%</p></td><td style=\"text-align:left;\"><p>54.12%</p></td><td style=\"text-align:left;\"><p>59.85%</p></td><td style=\"text-align:left;\"><p>40.05%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Based on the earnings and margins chart above, our derived average forward EBIT margin based on the reverse DCF model (41.6%) corresponds the closest to the company’s historical EBIT margin in 2021 (37.31%). In comparison, our projected EBIT margin (56.2%) is closer to the company’s historical margin in 2023 (54.12%).</p><p>Therefore, we analyzed the specific differences between the company’s margins in 2021 and improvement in 2023. Firstly, in terms of gross margins, the company’s gross margins improved from 64.3% in 2021 to 72.72% in 2023 which indicates it benefited from economies of scale and contributed to its EBIT margin increase. Also, we analyzed in our previous analysis one main reason for the decline in margins in 2022 was due to inventory provisions which had “impacted its gross margins by 7.5%” because of “the slump in the GPU market as its shipments fell by 48%” that year, but expected it to be non-recurring as the GPU market improved beyond that.</p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Nvidia</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>Average</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Employee Headcount</p></td><td style=\"text-align:left;\"><p>13,775</p></td><td style=\"text-align:left;\"><p>18,975</p></td><td style=\"text-align:left;\"><p>22,473</p></td><td style=\"text-align:left;\"><p>26,196</p></td><td style=\"text-align:left;\"><p>29,600</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Growth %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>37.7%</p></td><td style=\"text-align:left;\"><p>18.4%</p></td><td style=\"text-align:left;\"><p>16.6%</p></td><td style=\"text-align:left;\"><p>13.0%</p></td><td style=\"text-align:left;\"><p>21.4%</p></td></tr><tr><td style=\"text-align:left;\"><p>SG&amp;A ($ mln)</p></td><td style=\"text-align:left;\"><p>1,093</p></td><td style=\"text-align:left;\"><p>1,912</p></td><td style=\"text-align:left;\"><p>2,166</p></td><td style=\"text-align:left;\"><p>2,440</p></td><td style=\"text-align:left;\"><p>2,654</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Growth %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>74.9%</p></td><td style=\"text-align:left;\"><p>13.3%</p></td><td style=\"text-align:left;\"><p>12.7%</p></td><td style=\"text-align:left;\"><p>8.8%</p></td><td style=\"text-align:left;\"><p>27.4%</p></td></tr><tr><td style=\"text-align:left;\"><p>SG&amp;A % of Revenue</p></td><td style=\"text-align:left;\"><p>10.01%</p></td><td style=\"text-align:left;\"><p>11.47%</p></td><td style=\"text-align:left;\"><p>8.05%</p></td><td style=\"text-align:left;\"><p>9.05%</p></td><td style=\"text-align:left;\"><p>4.36%</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>R&amp;D ($ mln)</p></td><td style=\"text-align:left;\"><p>2,829</p></td><td style=\"text-align:left;\"><p>3,924</p></td><td style=\"text-align:left;\"><p>5,268</p></td><td style=\"text-align:left;\"><p>7,339</p></td><td style=\"text-align:left;\"><p>8,675</p></td><td style=\"text-align:left;\"><p></p></td></tr><tr><td style=\"text-align:left;\"><p>Growth %</p></td><td style=\"text-align:left;\"><p></p></td><td style=\"text-align:left;\"><p>38.7%</p></td><td style=\"text-align:left;\"><p>34.3%</p></td><td style=\"text-align:left;\"><p>39.3%</p></td><td style=\"text-align:left;\"><p>18.2%</p></td><td style=\"text-align:left;\"><p>32.6%</p></td></tr><tr><td style=\"text-align:left;\"><p>R&amp;D % of Revenue</p></td><td style=\"text-align:left;\"><p>25.91%</p></td><td style=\"text-align:left;\"><p>23.53%</p></td><td style=\"text-align:left;\"><p>19.57%</p></td><td style=\"text-align:left;\"><p>27.21%</p></td><td style=\"text-align:left;\"><p>14.24%</p></td><td style=\"text-align:left;\"><p></p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, another factor in the increased margins is lower growth in SG&amp;A and R&amp;D expenses. As stated by management, the increase in R&amp;D as well as SG&amp;A for fiscal year 2023 “was primarily driven by increased compensation and employee growth”. We compared the employee growth of Nvidia with its SG&amp;A and R&amp;D expense growth. As seen in the table, the company’s SG&amp;A expense growth has been lower than employee growth and revenue growth between 2021 to 2023, leading to lower SG&amp;A % of revenue from 8.05% to 4.36%. We believe this could be due to the company’s business model with an ecosystem of partners including a network of cloud providers, PC &amp; server makers, and distributors, allowing the company to depend on its established partner ecosystems to increase sales rather than requiring to scale its direct sales force.</p><p>On the other hand, its R&amp;D expenses growth had been higher than employee growth over the period. However, its R&amp;D expenses growth had been lower than revenue growth, leading to a decline of R&amp;D % of Revenue from 19.57% in 2021 to 14.24% in 2023. We believe the reason for this is related to its business model, as the company is a chip designer. It designs main chip architectures such as Blackwell and focuses on developments to improve its chipset architectures; thus we believe its business model primarily requires better-skilled employees and talent which the company could attract by increasing its compensation, explaining the higher expense growth compared to employee growth.</p><p>Overall, we believe the company could at least sustain its margins around its historical 2023 levels, by maintaining its level of economies of scale as its sales capacity is much higher compared to 2021. Additionally, we expect its operating expenses (R&amp;D and SG&amp;A) % of Revenue to be maintained due to its business model. We believe the company’s partner ecosystem is more established compared to 2021 as it has expanded partnerships with key cloud partners as well as management highlighted in its recent earnings briefing that “Blackwell will be available in over 100 OEM and ODM systems at launch, more than double the number of Hopper&#39;s launch”. Furthermore, we believe its increased compensation levels could indicate its ability to attract and retain better-skilled employees compared to 2021.</p><h3 id=\"id_2296655564\">FCF Margins</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e81bbff1ef994c48084383e3ddc0bf29\" tg-width=\"640\" tg-height=\"360\"/></p><p>Company Data, Khaveen Investments</p><p></p><table style=\"border-collapse:collapse;\"><tbody><tr><td style=\"text-align:left;\"><p><strong>Earnings &amp; Margins</strong></p></td><td style=\"text-align:left;\"><p><strong>2014</strong></p></td><td style=\"text-align:left;\"><p><strong>2015</strong></p></td><td style=\"text-align:left;\"><p><strong>2016</strong></p></td><td style=\"text-align:left;\"><p><strong>2017</strong></p></td><td style=\"text-align:left;\"><p><strong>2018</strong></p></td><td style=\"text-align:left;\"><p><strong>2019</strong></p></td><td style=\"text-align:left;\"><p><strong>2020</strong></p></td><td style=\"text-align:left;\"><p><strong>2021</strong></p></td><td style=\"text-align:left;\"><p><strong>2022</strong></p></td><td style=\"text-align:left;\"><p><strong>2023</strong></p></td><td style=\"text-align:left;\"><p><strong>TTM</strong></p></td><td style=\"text-align:left;\"><p><strong>5-yr Avg</strong></p></td></tr><tr><td style=\"text-align:left;\"><p>Free Cash Flow Margin (Capex Only)</p></td><td style=\"text-align:left;\"><p>17.05%</p></td><td style=\"text-align:left;\"><p>21.86%</p></td><td style=\"text-align:left;\"><p>21.70%</p></td><td style=\"text-align:left;\"><p>29.88%</p></td><td style=\"text-align:left;\"><p>26.30%</p></td><td style=\"text-align:left;\"><p>38.22%</p></td><td style=\"text-align:left;\"><p>28.75%</p></td><td style=\"text-align:left;\"><p>30.82%</p></td><td style=\"text-align:left;\"><p>14.10%</p></td><td style=\"text-align:left;\"><p>43.56%</p></td><td style=\"text-align:left;\"><p>48.49%</p></td><td style=\"text-align:left;\"><p>33.1%</p></td></tr><tr><td style=\"text-align:left;\"><p>Adjusted CapEx/Revenue</p></td><td style=\"text-align:left;\"><p>2.6%</p></td><td style=\"text-align:left;\"><p>1.7%</p></td><td style=\"text-align:left;\"><p>2.5%</p></td><td style=\"text-align:left;\"><p>6.1%</p></td><td style=\"text-align:left;\"><p>5.1%</p></td><td style=\"text-align:left;\"><p>4.5%</p></td><td style=\"text-align:left;\"><p>6.8%</p></td><td style=\"text-align:left;\"><p>3.6%</p></td><td style=\"text-align:left;\"><p>6.8%</p></td><td style=\"text-align:left;\"><p>1.8%</p></td><td style=\"text-align:left;\"><p>1.5%</p></td><td style=\"text-align:left;\"><p>4.1%</p></td></tr><tr><td style=\"text-align:left;\"><p>Adjusted CapEx/Fixed Assets</p></td><td style=\"text-align:left;\"><p>8.2%</p></td><td style=\"text-align:left;\"><p>6.5%</p></td><td style=\"text-align:left;\"><p>13.5%</p></td><td style=\"text-align:left;\"><p>29.9%</p></td><td style=\"text-align:left;\"><p>21.9%</p></td><td style=\"text-align:left;\"><p>13.5%</p></td><td style=\"text-align:left;\"><p>8.9%</p></td><td style=\"text-align:left;\"><p>6.4%</p></td><td style=\"text-align:left;\"><p>10.1%</p></td><td style=\"text-align:left;\"><p>5.0%</p></td><td style=\"text-align:left;\"><p>5.1%</p></td><td style=\"text-align:left;\"><p>7.1%</p></td></tr></tbody></table><p>Click to enlarge</p><p><em>Source: Company Data, Khaveen Investments</em></p><p>Furthermore, the reverse DCF model average forward FCF margins (24.8%) are closer to the company’s historical FCF margins in 2020 (28.75%). In comparison, our projected forward average FCF margin (39.4%) is higher and more aligned with its 2023 FCF margin (43.56%). The improvement of the company’s FCF margin is mainly due to the rise in its EBIT margin as explained above from 2021 to 2023 (16.8%). Furthermore, another factor for the increase in FCF margins is due to its higher EBIT margins as explained above as well as lower capex intensity. From the table above, its capex % of revenue and fixed assets declined in 2023 and TTM to its lowest levels over the period which we believe is due to the lean operating business model of Nvidia as a fabless chipmaker with minimal capex requirements to support revenue growth, depending on foundry partners such as TSMC.</p><h3 id=\"id_2563638781\">Forward Margins</h3><p>Overall, the reverse DCF model margins are lower compared to our projected margins in terms of both EBIT and FCF margins. The reverse DCF EBIT average forward margins (41.6%) are in line with the company’s historical 2021 margin levels, while our projected margins are closer to its 2023 margins. We believe our margin assumptions are more appropriate as the company’s EBIT margin has improved between 2021 to 2023 due to improved economies of scale with higher gross margins as well as its lower operating expenses including SG&amp;A and R&amp;D due to its business model depending on its established partner ecosystem for sales and its R&amp;D activities as a chip designer. Furthermore, we expect its higher sales capacity and improved partner ecosystem and enhanced R&amp;D capabilities to sustain its current margin levels going forward; thus we believe our forecasted margins to be more appropriate. Additionally, we highlighted the improved EBIT margins supporting its FCF, which bodes well for its FCF margins.</p><h2 id=\"id_2066159317\">Risk: Growth Outlook</h2><p>Among the 3 factors analyzed, we believe our assumptions are appropriate compared to the reversed DCF model. However, we believe revenue growth could be a risk due to competitive factors as AMD is expected to release more details for its upcoming launch of its MI350X, and data center customers invest in their chip development which leads us to await further details on their performance capabilities to determine whether they could be formidable rivals to Nvidia. Based on our projections previously derived based on market growth and competitive factor for Nvidia, the competitive factor contributes 21% of growth for its Data Center segment. Further, Nvidia faces geopolitical risks such as in China with the imposition of sanctions on sales to Chinese chipmakers, which could affect its competitiveness in that market. China accounted for 17% of its total revenues in FY2024.</p><h2 id=\"id_1998547241\">Valuation</h2><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/4048dc1eeb437f7d3203c3adf2c80170\" tg-width=\"640\" tg-height=\"360\"/></p><p>Khaveen Investments</p><p></p><p>We maintain the same assumption for our valuation from our previous analysis, as we have thoroughly justified the appropriateness in this analysis but with a lower discount rate of 13.5% (company’s WACC). This includes revenue growth (57.1%), EV/EBITDA based on US-only chipmakers (27.78x), average forward EBIT (56.2%), and FCF margin (39.4%) and derived an upside of 8.84%.</p><h2 id=\"id_3188397411\">Verdict</h2><p>We believe our 5-year forward average revenue growth projections for Nvidia are appropriate, albeit slightly higher than our market-implied growth assumption (44.8% vs 41.2%), driven by the execution of its product roadmap with new products including Blackwell supporting its competitiveness. Furthermore, we believe Nvidia&#39;s strong partnerships with major cloud providers further could contribute to sustained growth. In terms of the terminal value, we believe our EV/EBITDA assumption of 27.78x, based on the US-only average for chipmakers, is more appropriate than the reverse DCF model-derived value, which aligns with the overall semiconductor average. The US-only average is the lowest compared to Logic Chipmaker, High Growth, and Nvidia&#39;s historical averages, making our assumption relatively conservative. Finally, we believe our higher margin projections compared to the reverse DCF are more appropriate, reflecting Nvidia&#39;s improved economies of scale, higher gross margins, and lower operating expenses. Also, we expect its higher sales capacity, robust partner ecosystem, and advanced R&amp;D capabilities to sustain these margins and positively contribute to its robust FCFs. However, Nvidia’s share price has rocketed by 43% in the past month and 58% since our last coverage, meeting our price target while overtaking Apple and Microsoft as the most valuable company. Therefore, we believe its current valuation is appropriate, and we have updated our latest price target of <em>$147.57</em> (14% higher than $129.71 previously mainly due to a lower discount rate) indicates limited upside in the near term of 8.84% based on our current conservative assumptions; thus we now downgrade it as a <em>Hold.</em></p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: Valuation Seems Reasonable After Recent Rally</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: Valuation Seems Reasonable After Recent Rally\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-20 11:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4699963-nvidia-stock-valuation-seems-reasonable-after-recent-rally-downgrade-hold><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.We use a Reverse DCF model to obtain the market-...</p>\n\n<a href=\"https://seekingalpha.com/article/4699963-nvidia-stock-valuation-seems-reasonable-after-recent-rally-downgrade-hold\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MSFT":"微软","BK4227":"交易和支付处理服务","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","BK4525":"远程办公概念","NVDA":"英伟达","BK4587":"ChatGPT概念","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","BK4575":"芯片概念","LU0171293334.USD":"贝莱德英国基金A2","LU0310800965.SGD":"FTIF - Templeton Global Balanced A Acc SGD","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","BK4077":"互动媒体与服务","ORCL":"甲骨文","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","UBS":"瑞银","INTC":"英特尔","LU0949170772.SGD":"Blackrock Global Equity Income A6 SGD-H","LU1691799644.USD":"Amundi Funds Polen Capital Global Growth A2 (C) USD","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","BK4122":"互联网与直销零售","BK4574":"无人驾驶","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","GOOGL":"谷歌A","AMD":"美国超微公司","LU0985489474.SGD":"First Eagle Amundi International AHS-C SGD-H","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","LU0149725797.USD":"汇丰美国股市经济规模基金","LU0878866978.SGD":"First Eagle Amundi International AHS-QD SGD-H","LU0738911758.USD":"Blackrock Global Equity Income A6 USD","GOOG":"谷歌","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","BK4548":"巴美列捷福持仓","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU2458330169.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A\" (SGD) ACC","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0068578508.USD":"First Eagle Amundi International Cl AU-C USD","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","BK4516":"特朗普概念","LU1506573853.SGD":"MANULIFE GF GLOBAL EQUITY \"AA\" (SGD) INC","BK4554":"元宇宙及AR概念","BK4515":"5G概念","LU0056508442.USD":"贝莱德世界科技基金A2","LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1","BK4585":"ETF&股票定投概念"},"source_url":"https://seekingalpha.com/article/4699963-nvidia-stock-valuation-seems-reasonable-after-recent-rally-downgrade-hold","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2444429849","content_text":"Nvidia has passed Apple and Microsoft to become the largest company in the world, and we evaluate if the company deserves such high of a valuation.We use a Reverse DCF model to obtain the market-implied assumptions of the company's growth rate, terminal value multiples, and profit margins and compare them against our own assumptions.We believe the company's Blackwell architecture launch and expanded cloud partnerships with major providers contribute to its competitiveness and growth outlook.BING-JHEN HONGIn our previous analysis of NVIDIA Corporation (NASDAQ:NVDA) (NEOE:NVDA:CA), we highlighted the strong performance of Nvidia’s growth of 126% in CY2023, and we remained positive on Nvidia’s Data Center segment, supported by cloud partnerships and sovereign AI initiatives. For 2024, we projected a 58% overall revenue growth, led by the Data Center, with contributions from Gaming, Professional Visualization, and a recovery in PC GPU revenue, as well as 20.6% growth in the Automotive segment.Since our last analysis in March, we started reviewing Nvidia again as its share price had risen by 28% in May, with a further upside of 18.3% left based on our previous price target of $1,294.14 ($129.41 post-stock split). Therefore, we initially aimed to determine whether our expectations for Nvidia’s upside were justified. Since then, Nvidia has overtaken both Apple and Microsoft as the largest company globally by market cap, rising by a further 30% and meeting our price target. Firstly, we conducted a reverse DCF analysis determining the market implied revenue growth forecast, terminal value multiple, and profitability margins. Based on that, we compared the reverse DCF model with our revenue, terminal value and margin assumptions and determined whether our assumptions were appropriate.Sustainable Revenue GrowthFirstly, we examined whether our revenue growth forecast is appropriate. Based on the reverse DCF model, holding all previous assumptions constant, we derived the market-implied revenue growth rate for Nvidia based on the current market price.Company Data, Khaveen InvestmentsRevenue Comparison ($ mln)2024F2025F2026F2027F2028F2029F2030F2031F2032F2033FAvr. (5-yr)Avr. (10-yr)Revenue (Reverse DCF)113,185163,293220,004273,487320,027358,148388,012410,660427,439439,664Revenue Growth85.8%44.3%34.7%24.3%17.0%11.9%8.3%5.8%4.1%2.9%41.2%23.9%Revenue (Our Previous Forecast)95,720148,848225,273306,238383,284450,785506,357550,053583,280607,943Revenue Growth57.1%55.5%51.3%35.9%25.2%17.6%12.3%8.6%6.0%4.2%45.0%27.4%Click to enlargeSource: Company Data, Khaveen InvestmentsBased on the reverse DCF model, we derived the revenue growth rate at a forward average of 41.2% in the next 5 years, compared to our average forward growth forecast of 44.8%. Furthermore, we derived a 10-year forward growth of 23.9% from the reverse DCF model, compared to 27.4% from our projections. Therefore, this indicates our revenue growth assumption is higher compared to the calculated growth rate from the reverse DCF model. In our previous analysis, we highlighted that we maintained a more stable long-term growth projection “derived independently based on individual segment projections and modeling” for the company “driven primarily due to its Data Center segment at a forward average of 60.9% underpinned by its AI leadership”.We examined the latest developments of the company which could support its growth outlook below, including its product launch of its Blackwell architecture, expanded partnerships, and competition.Competitiveness (Blackwell Launch)Nvidia announced the next-gen Blackwell architecture in March 2024, claiming that it enhances computing and generative AI by providing improvements in scale, performance, and efficiency, with customer data centers planned to be operational by Q4 2024. The Blackwell-architecture GPUs are “manufactured using a custom-built 4NP TSMC process” with 208 bln transistors. Previously, we had highlighted the company’s Blackwell architecture based on the company’s provided roadmap in 2024; thus, we believe this indicates its execution on its continued product launches for Data Center.CategoryH100H200B100B200GB200 SuperchipPrice$24,000$24,000$30,000$30,000-$40,000$60,000-$70,000Increase %0.0%25.0%16.7%85.7%Memory Capacity (GB)80.00141.00192.00192.00384.00Memory Bandwidth (GB/s)3,352.004,800.008,000.008,000.0016,000.00Improvement %43.2%66.7%0.0%100.0%TF32 (Teraflops)495.00495.00900.001,100.002,500.00Improvement %0.0%81.8%22.2%127.3%FP16 (Teraflops)989.00989.001,750.002,250.005,000.00Improvement %0.0%76.9%28.6%122.2%FP8 (Teraflops)1,979.001,979.003,500.004,500.0010,000.00Improvement %0.0%76.9%28.6%122.2%FP4 (Teraflops)1,979.001,979.007,000.009,000.0020,000.00Improvement %0.0%253.7%28.6%122.2%Click to enlargeSource: Company Data, Khaveen InvestmentsAccording to the above table comparing the GPUs across Nvidia’s portfolio, the Blackwell chips (B100 and B200) show increasing capabilities including memory capacity, memory bandwidth, and improvements in floating-point performance metrics which play important roles in deep learning model training, as well as higher pricing compared to the Hopper chips (H100 and H200).Additionally, the GB200 Superchip which consists of two Blackwell GPUs and one Grace CPU, is reported to have a price range of $60,000-$70,000, along with doubled memory capacity and bandwidth in comparison to previous gen B200 and more than 100% of improvements in the above listed floating-point performance metrics for deep learning model training.Furthermore, we updated our comparison of the top data center GPU chips of Nvidia with its top competitors. Besides Nvidia, AMD (AMD) is expected to launch its new MI350 chip this year and Intel’s (INTC) new Gaudi 3 is expected to be released in Q2. Furthermore, Nvidia highlighted competition in China from Huawei which is expected to release its new and improved Ascend 910B chip this year as well following its Ascend 910 introduction in 2019.Data Center GPU Comparison MetricsAMD (MI300x)AMD (MI350)Nvidia (B100)Nvidia (GB200 Superchip)Intel (Gaudi 2)Intel (Gaudi 3)Huawei (Ascend 910B)Processor5nm (TSMC)4nm (TSMC)4nm (TSMC)4nm (TSMC)7nm (TSMC)5nm (TSMC)7nmTransistors ('bln')153-208208>100--FP16 Peak (Teraflops)1,532-3,50010,0008391,835320INT 8 (Teraflops)3,064-7,00040,0001,628-640Memory Clock1.9GHz-8Gbps HBM3E8Gbps HBM3E1.56GHz3.6GHz-Memory Capacity192GB288GB192GB384GB96GB128GB64GBMemory Bandwidth5.2TB/sec-8TB/sec16TB/sec2.45TB/sec3.7TB/sec-Interconnect Bandwidth896 GB/sec-1800GB/s1800GB/s300GB/s600GB/s400G/sMax Power Consumption700W-700W1000W600W900W310WClick to enlargeSource: Company Data, Khaveen InvestmentsBased on the table, Nvidia’s Blackwell chips show superior performance capabilities, especially GB200 Superchip which stands out with its 4nm processor, highest transistor counts at 208 bln, and exceptional FP16 and INT8 peak performance metrics, 10,000 teraflops and 40,000 teraflops, respectively. It also offers the largest memory capacity of 384GB and the highest memory bandwidth at 16TB/sec, although it comes with the highest power consumption of 1000W.In contrast, AMD has yet to provide details on its MI350 product with limited information about it besides its 4nm process and 288Gb memory capacity, which is lower than the Nvidia GB200. The previous AMD MI300x was built on a 5nm process, providing 1,532 teraflops of FP16 and 3,064 teraflops of INT8 performance with a memory capacity of 192GB and bandwidth of 5.2TB/sec, consuming 700W.Furthermore, Intel Gaudi 3 also uses 5nm technology, with 1,835 teraflops FP16 and 128GB memory but has a higher power consumption of 900W. Notably, the Huawei Ascend 910B, although using older 7nm technology, has the lowest power consumption of 310W.Overall, our forward average revenue growth rate projections (45%) are higher compared to the market implied growth rate through the reverse DCF model (41.2%), a difference of 3.8% which we expect due to the company’s enhanced competitiveness. For example, we believe the improvements in Nvidia’s data center GPU capabilities with Blackwell highlight the company’s execution of its product roadmap and commitment to future product launches, which could cement its competitiveness.PartnershipsCompanyPurpose of Adoption of BlackwellCloud Market ShareAvr. Revenue Growth (3-yr)Cloud Revenue ($ bln)AWSTo securely build and run large AI models on AWS34%26.4%90.76Google CloudTo enable Google Cloud with advanced AI and data analytics capabilities12%37.7%33.09MicrosoftTo boost Microsoft Azure's capabilities regarding large-scale AI workloads handling26%38.8%70.20OracleTo enhance Oracle's AI model capabilities for faster and higher efficiency of data processing and AI training2%30.2%5.70Click to enlargeSource: Company Data, Khaveen InvestmentsAlong with the launch of NVIDIA’s Grace Blackwell GPU platform, its cloud partners including AWS (AMZN), Google (GOOG), Microsoft (MSFT), and Oracle (ORCL) announced plans for adoption. Firstly, AWS will “offer the NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs” and enhance the performance of its AI models with Nvidia’s Grace Blackwell GPU and DGX Cloud. Similarly, Google Cloud claims future adoption of the Grace Blackwell platform to its “AI Hypercomputer architecture in two configurations”, while also focusing on the development of trillion-parameter language models. Microsoft aims to improve its AI infrastructure with the integration of Grace Blackwell GB200 with Microsoft Azure. Oracle also plans on adopting Nvidia’s Grace Blackwell platform across its OCI Supercluster and OCI Compute, aiming to improve performance and efficiency for AI workloads such as LLM inference.Based on the table above, we believe these expanded partnerships with AWS, Google, Microsoft, and Oracle are significant for Nvidia as these major cloud providers purchase and use Nvidia’s chips. They account for 74% of the global cloud market share combined and have robust growth averages of between 26.4% to 38.8%. Furthermore, according to UBS (UBS), Microsoft is believed to be its largest customer with 19% of revenues last year.Overall, we believe the expanded partnerships of Nvidia with the major cloud providers market share combined bodes well for the sustainability of its growth outlook, which is reflected in our projections as we forecasted its forward 3-year growth rate of around 54% on average compared to the reverse DCF model growth which tapers down significantly from 86% to 35% in the next 3 years, as we expect the company’s growth to continue to be sustained by the adoption of upcoming products such as Blackwell.Current Development of CSPs With Their Own AI ChipsTrendForceHowever, according to TrendForce, several cloud service providers such as Microsoft and Google have also been developing their respective AI chip technologies recently. For instance, Microsoft is currently in the process of developing their “in-house AI chip Azure Maia 100” and Cobalt 100, which we covered in our previous analysis. Along with Google’s recent development of its tensor processing unit (TPU) of v5e, which is particularly designed for training large AI models. Despite that, Google stated it will provide the optionality for customers to use Google TPUs and Nvidia’s Blackwell GPUs. Additionally, other major companies such as Tesla, Meta, and OpenAI are also pursuing their own respective development regarding AI accelerator chips.Therefore, as competition heats up against Nvidia from key competitors, we believe our projections fairly incorporated this as we tapered down its growth rate beyond 2026. Additionally, while the development of custom AI chips by its cloud customers could affect the company’s growth, we believe Nvidia has an advantage as these companies are not specialized in chip design. While these companies have higher total company absolute R&D expenses than Microsoft, Amazon, and Google, they predominantly focus across the Software & Services (Microsoft), Consumer Discretionary Distribution & Retail (Amazon), and Media & Entertainment industries (Google). Therefore, in comparison, Nvidia is more specialized as it focuses on Semiconductors, enhancing its competitiveness with improved capabilities over competition, including custom chips from cloud providers. For example, in our analysis of Microsoft, we highlighted Microsoft’s Maia 100 GPU trailing behind Nvidia’s H100 chip specifications as it uses older process technology (5nm) and has memory capacity and bandwidth. Furthermore, the Maia 100 would lag behind compared to Nvidia’s B100 chips with an even wider gap as the B100 has twice the number of transistors and 3x higher memory capacity and bandwidth than the Maia 100. Furthermore, we also highlighted the focus on cost as a rationale for custom chip development by cloud providers, such as Microsoft emphasizing Maia enabling cheaper models for customers and “to diversify and provide choices to customers” rather than replacing Nvidia’s high-performance GPUs as well as Amazon highlighting its low-cost AI inference enabled by Inferentia2.Forward GrowthOverall, our revenue growth projections (44.8%) are higher compared to the calculated market implied revenue growth of the company (41.2%), but we believe it is appropriate given factors such as the enhanced competitiveness of Nvidia and execution on its product roadmap such as with the upcoming Blackwell launch, which we believe cements its competitive positioning against key competitors and custom chip developments by cloud providers, supporting our expectations for the company to continue outperforming the market growth as reflected by our revenue projections. Additionally, our projection which is more sustainable on a 3-year forward average compared to the market implied growth through the reverse DCF which we believe could be supported by the expanded partnerships of major cloud service providers with Nvidia.Determining Appropriate Terminal ValueFurthermore, we conducted another reverse DCF analysis, adjusting our model holding all assumptions constant except for our terminal value which is derived based on the EV/EBITDA multiple.Company Data, Khaveen InvestmentsComparisonTerminal ValueEV/EBITDAReverse DCF8,091,52119.17xOur DCF9,712,48727.78xClick to enlargeSource: Company Data, Khaveen InvestmentsBased on the table, we calculated the Reverse DCF method a terminal value of $8,091 mln with an EV/EBITDA multiple of 19.17x. In comparison, our previous analysis, however, shows a higher terminal value of $9,712 mln and an EV/EBITDA multiple of 27.78x. Previously, we based our terminal value EV/EBITDA on the 5-year US-only chipmaker average of 27.78x.Industry MultipleSeeking Alpha, Investing.com, Khaveen InvestmentsEV/EBITDA and CAGR ComparisonEV/EBITDA (5-yr)5-year Revenue CAGRUS Only27.78x11.70%European Only11.65x13.44%Asian Only8.26x6.99%Overall21.58x11.18%Click to enlargeSource: Company Data, Khaveen InvestmentsWe compiled the US-only chipmaker EV/EBITDA and compared it with the non-US chipmaker EV/EBITDA above. The overall chipmaker average is 21.58x, closer to our calculated reverse DCF model multiple of 19.17x. However, the US-only chipmakers have a much higher average of 27.78x compared to 9.96x for non-US chipmakers. Thus, this indicates a premium for US-only chipmakers, which we believe is more appropriate for Nvidia’s valuation.EV/EBITDA and CAGR ComparisonEV/EBITDA (5-yr)5-year Revenue CAGRLogic33.14x16.85%DAO19.89x10.98%Memory6.36x-3.66%Click to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, we categorized companies within the industry based on their primary business segments. The logic segment demonstrates the highest multiple of 33.14x along with the highest CAGR of 16.85. On the other hand, the memory segment shows a relatively lower multiple at 6.36x with a negative CAGR of -3.66%. Hence, with the Logic segment’s higher EV/EBITDA, we believe this supports a higher multiple used for Nvidia’s valuation as a Logic chipmaker.EV/EBITDA and CAGR ComparisonEV/EBITDA (5-yr)5-year Revenue CAGRHigher Growth (20%+)45.80x31.22%Medium Growth (10% to 20%)21.94x11.67%Low Growth (0% to 10%)13.10x4.41%Negative Growth (<0%)8.00x-6.12%Click to enlargeSource: Company Data, Khaveen InvestmentsAdditionally, we further compiled the above table by stratifying major companies within the industry by their respective growth rates. We observed that companies experiencing higher growth (20%+) hold the highest multiples at 45.80x along with a high CAGR of 31.22%. This contrasts with the companies possessing negative growth (<0%), which are valued at a lower multiple of 8.00x with a CAGR of -6.12%. Thus, this further supports Nvidia’s higher multiple used as it aligns with the high growth category at a CAGR of 49.37%.Company MultipleYChartsNvidia20192020202120222023AverageEV/EBITDA42.18x55.91x53.23x80.26x42.19x54.75xClick to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, we analyzed the company’s historical EV/EBITDA above. The company’s EV/EBITDA has been volatile with a significant spike in 2023 but has moderated since. Its 5-year median multiple shows a rising trend. Its 5-year average is 54.75x, thus using its 5-year average EV/EBITDA would result in a much higher terminal value and valuation of the company compared to our assumption based on the 5-year average US-only chipmakers.Forward MultipleEV/EBITDA AverageMultipleUS Only27.78xLogic Chipmaker33.14xHigh Growth45.80xNvidia Historical54.75xClick to enlargeSource: Company Data, Khaveen InvestmentsOverall, we believe our EV/EBITDA assumption used of 27.78x, based on the US-only average chipmakers, is more appropriate compared to our derived EV/EBITDA based on the reverse DCF model which is more in line with the overall semicon chipmaker average. Furthermore, comparing the average EV/EBITDA in the table summary above, the US-only average has the lowest compared to Logic Chipmaker, High Growth, and Nvidia's Historical average; thus we believe our assumption is relatively conservative.Strong Profit MarginsFinally, we conducted the reverse DCF analysis on its profitability margins, holding all other assumptions constant. We adjusted the reverse DCF model to obtain the EBIT and FCF margins based on the current market price.Company Data, Khaveen InvestmentsComparisonEBIT MarginFCF MarginReverse DCF41.6%24.8%Our Previous Analysis56.2%39.4%Click to enlargeSource: Company Data, Khaveen InvestmentsAs seen above, the reverse DCF model calculated an average 5-year forward EBIT margin of 41.6% compared to 56.2% for our assumptions based on our previous analysis. Additionally, in terms of FCF margins, the reverse DFC model implies an average 24.8% forward FCF margin, lower compared to our forecasts of 39.4%.Gross and EBIT MarginsCompany Data, Khaveen InvestmentsEarnings & Margins2014201520162017201820192020202120222023TTM5-year AverageGross Margin55.51%56.11%58.80%59.93%61.21%61.99%63.31%64.93%56.93%72.72%75.29%66.6%EBIT Margin16.21%17.52%28.03%33.05%32.47%26.07%28.31%37.31%20.68%54.12%59.85%40.05%Click to enlargeSource: Company Data, Khaveen InvestmentsBased on the earnings and margins chart above, our derived average forward EBIT margin based on the reverse DCF model (41.6%) corresponds the closest to the company’s historical EBIT margin in 2021 (37.31%). In comparison, our projected EBIT margin (56.2%) is closer to the company’s historical margin in 2023 (54.12%).Therefore, we analyzed the specific differences between the company’s margins in 2021 and improvement in 2023. Firstly, in terms of gross margins, the company’s gross margins improved from 64.3% in 2021 to 72.72% in 2023 which indicates it benefited from economies of scale and contributed to its EBIT margin increase. Also, we analyzed in our previous analysis one main reason for the decline in margins in 2022 was due to inventory provisions which had “impacted its gross margins by 7.5%” because of “the slump in the GPU market as its shipments fell by 48%” that year, but expected it to be non-recurring as the GPU market improved beyond that.Nvidia20192020202120222023AverageEmployee Headcount13,77518,97522,47326,19629,600Growth %37.7%18.4%16.6%13.0%21.4%SG&A ($ mln)1,0931,9122,1662,4402,654Growth %74.9%13.3%12.7%8.8%27.4%SG&A % of Revenue10.01%11.47%8.05%9.05%4.36%R&D ($ mln)2,8293,9245,2687,3398,675Growth %38.7%34.3%39.3%18.2%32.6%R&D % of Revenue25.91%23.53%19.57%27.21%14.24%Click to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, another factor in the increased margins is lower growth in SG&A and R&D expenses. As stated by management, the increase in R&D as well as SG&A for fiscal year 2023 “was primarily driven by increased compensation and employee growth”. We compared the employee growth of Nvidia with its SG&A and R&D expense growth. As seen in the table, the company’s SG&A expense growth has been lower than employee growth and revenue growth between 2021 to 2023, leading to lower SG&A % of revenue from 8.05% to 4.36%. We believe this could be due to the company’s business model with an ecosystem of partners including a network of cloud providers, PC & server makers, and distributors, allowing the company to depend on its established partner ecosystems to increase sales rather than requiring to scale its direct sales force.On the other hand, its R&D expenses growth had been higher than employee growth over the period. However, its R&D expenses growth had been lower than revenue growth, leading to a decline of R&D % of Revenue from 19.57% in 2021 to 14.24% in 2023. We believe the reason for this is related to its business model, as the company is a chip designer. It designs main chip architectures such as Blackwell and focuses on developments to improve its chipset architectures; thus we believe its business model primarily requires better-skilled employees and talent which the company could attract by increasing its compensation, explaining the higher expense growth compared to employee growth.Overall, we believe the company could at least sustain its margins around its historical 2023 levels, by maintaining its level of economies of scale as its sales capacity is much higher compared to 2021. Additionally, we expect its operating expenses (R&D and SG&A) % of Revenue to be maintained due to its business model. We believe the company’s partner ecosystem is more established compared to 2021 as it has expanded partnerships with key cloud partners as well as management highlighted in its recent earnings briefing that “Blackwell will be available in over 100 OEM and ODM systems at launch, more than double the number of Hopper's launch”. Furthermore, we believe its increased compensation levels could indicate its ability to attract and retain better-skilled employees compared to 2021.FCF MarginsCompany Data, Khaveen InvestmentsEarnings & Margins2014201520162017201820192020202120222023TTM5-yr AvgFree Cash Flow Margin (Capex Only)17.05%21.86%21.70%29.88%26.30%38.22%28.75%30.82%14.10%43.56%48.49%33.1%Adjusted CapEx/Revenue2.6%1.7%2.5%6.1%5.1%4.5%6.8%3.6%6.8%1.8%1.5%4.1%Adjusted CapEx/Fixed Assets8.2%6.5%13.5%29.9%21.9%13.5%8.9%6.4%10.1%5.0%5.1%7.1%Click to enlargeSource: Company Data, Khaveen InvestmentsFurthermore, the reverse DCF model average forward FCF margins (24.8%) are closer to the company’s historical FCF margins in 2020 (28.75%). In comparison, our projected forward average FCF margin (39.4%) is higher and more aligned with its 2023 FCF margin (43.56%). The improvement of the company’s FCF margin is mainly due to the rise in its EBIT margin as explained above from 2021 to 2023 (16.8%). Furthermore, another factor for the increase in FCF margins is due to its higher EBIT margins as explained above as well as lower capex intensity. From the table above, its capex % of revenue and fixed assets declined in 2023 and TTM to its lowest levels over the period which we believe is due to the lean operating business model of Nvidia as a fabless chipmaker with minimal capex requirements to support revenue growth, depending on foundry partners such as TSMC.Forward MarginsOverall, the reverse DCF model margins are lower compared to our projected margins in terms of both EBIT and FCF margins. The reverse DCF EBIT average forward margins (41.6%) are in line with the company’s historical 2021 margin levels, while our projected margins are closer to its 2023 margins. We believe our margin assumptions are more appropriate as the company’s EBIT margin has improved between 2021 to 2023 due to improved economies of scale with higher gross margins as well as its lower operating expenses including SG&A and R&D due to its business model depending on its established partner ecosystem for sales and its R&D activities as a chip designer. Furthermore, we expect its higher sales capacity and improved partner ecosystem and enhanced R&D capabilities to sustain its current margin levels going forward; thus we believe our forecasted margins to be more appropriate. Additionally, we highlighted the improved EBIT margins supporting its FCF, which bodes well for its FCF margins.Risk: Growth OutlookAmong the 3 factors analyzed, we believe our assumptions are appropriate compared to the reversed DCF model. However, we believe revenue growth could be a risk due to competitive factors as AMD is expected to release more details for its upcoming launch of its MI350X, and data center customers invest in their chip development which leads us to await further details on their performance capabilities to determine whether they could be formidable rivals to Nvidia. Based on our projections previously derived based on market growth and competitive factor for Nvidia, the competitive factor contributes 21% of growth for its Data Center segment. Further, Nvidia faces geopolitical risks such as in China with the imposition of sanctions on sales to Chinese chipmakers, which could affect its competitiveness in that market. China accounted for 17% of its total revenues in FY2024.ValuationKhaveen InvestmentsWe maintain the same assumption for our valuation from our previous analysis, as we have thoroughly justified the appropriateness in this analysis but with a lower discount rate of 13.5% (company’s WACC). This includes revenue growth (57.1%), EV/EBITDA based on US-only chipmakers (27.78x), average forward EBIT (56.2%), and FCF margin (39.4%) and derived an upside of 8.84%.VerdictWe believe our 5-year forward average revenue growth projections for Nvidia are appropriate, albeit slightly higher than our market-implied growth assumption (44.8% vs 41.2%), driven by the execution of its product roadmap with new products including Blackwell supporting its competitiveness. Furthermore, we believe Nvidia's strong partnerships with major cloud providers further could contribute to sustained growth. In terms of the terminal value, we believe our EV/EBITDA assumption of 27.78x, based on the US-only average for chipmakers, is more appropriate than the reverse DCF model-derived value, which aligns with the overall semiconductor average. The US-only average is the lowest compared to Logic Chipmaker, High Growth, and Nvidia's historical averages, making our assumption relatively conservative. Finally, we believe our higher margin projections compared to the reverse DCF are more appropriate, reflecting Nvidia's improved economies of scale, higher gross margins, and lower operating expenses. Also, we expect its higher sales capacity, robust partner ecosystem, and advanced R&D capabilities to sustain these margins and positively contribute to its robust FCFs. However, Nvidia’s share price has rocketed by 43% in the past month and 58% since our last coverage, meeting our price target while overtaking Apple and Microsoft as the most valuable company. Therefore, we believe its current valuation is appropriate, and we have updated our latest price target of $147.57 (14% higher than $129.71 previously mainly due to a lower discount rate) indicates limited upside in the near term of 8.84% based on our current conservative assumptions; thus we now downgrade it as a Hold.","news_type":1},"isVote":1,"tweetType":1,"viewCount":197,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":343682270834712,"gmtCreate":1724947283082,"gmtModify":1724947286767,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"I buy more wow","listText":"I buy more wow","text":"I buy more wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/343682270834712","repostId":"2463448958","repostType":2,"repost":{"id":"2463448958","kind":"highlight","pubTimestamp":1724900771,"share":"https://ttm.financial/m/news/2463448958?lang=&edition=fundamental","pubTime":"2024-08-29 11:06","market":"sh","language":"en","title":"Nvidia's Guidance Is A Disappointment","url":"https://stock-news.laohu8.com/highlight/detail?id=2463448958","media":"seekingalpha","summary":"Nvidia Corporation reported strong Q2 earnings, but growth has slowed compared to previous quarters, leading to a 5% drop in after-hours trading.The data center segment drove significant revenue growt","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia Corporation reported strong Q2 earnings, but growth has slowed compared to previous quarters, leading to a 5% drop in after-hours trading.</p></li><li><p>The data center segment drove significant revenue growth, but Nvidia&#39;s heavy reliance on this unit poses risks if it slows down.</p></li><li><p>Gross margins declined sequentially, and the new $50 billion buyback authorization is unlikely to significantly impact Nvidia&#39;s share count.</p></li><li><p>Nvidia remains a leader in AI data centers, but with a high valuation, waiting for a better entry point may be prudent.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/f1cd66fb76fb9c3656779aa6ac145d6d\" tg-width=\"750\" tg-height=\"500\"/></p><p>JHVEPhoto</p><p></p><h2 id=\"id_900299710\">Article Thesis</h2><p><strong>NVIDIA</strong> <strong>Corporation</strong> (NASDAQ:NVDA) reported its most recent quarterly earnings results on Wednesday afternoon. The company beat estimates once again, but Nvidia is experiencing a growth slowdown -- while growth is still great in absolute terms, it is not as great as it was a year ago. The market&#39;s reaction was rather negative, and a new $50 billion buyback authorization didn&#39;t change that.</p><h2 id=\"id_3146604327\">Past Coverage</h2><p>I have written about Nvidia Corporation in the past. My most recent article is from May, where I covered the company&#39;s first-quarter earnings results and the stock split the company announced at the time. With one quarter having passed since then, and with Nvidia announcing its most recent quarterly earnings results today, it is time for a thesis update.</p><h2 id=\"id_2094805477\">What Happened?</h2><p>Nvidia Corporation announced its Q2 results following the market&#39;s close on Wednesday. The headline results can be seen in the following screencap from Seeking Alpha:</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e097e0e0bac95c48f6d6c430913809d5\" tg-width=\"640\" tg-height=\"275\"/></p><p>Nvidia&#39;s quarterly earnings results (Seeking Alpha)</p><p></p><p>The company delivered another double beat, relative to the analyst consensus estimate, but the magnitude of the beat wasn&#39;t as large as in some quarters in the recent past. The revenue estimate was beaten by around 4%, while the earnings per share estimate was beaten by around 6%. That&#39;s good, but not as great as the revenue and earnings per share beats of around 20% and 30%, respectively, one year ago.</p><p>The market seems to be a bit disappointed, as Nvidia&#39;s shares are trading down 5% in after-hours trading at the time of writing. This could change, of course, and the share price might be different on Thursday, as investors will digest Nvidia&#39;s results and guidance over the coming hours.</p><h2 id=\"id_3202945778\">Nvidia&#39;s Performance During The Second Quarter</h2><p>Nvidia generated massive revenue growth on a year-over-year basis, which was expected by everyone. Like in previous quarters, this business growth was largely driven by Nvidia&#39;s data center segment. Here, revenues were up 155% compared to the previous year&#39;s quarter, while overall revenues were up by 122% compared to one year earlier. Data center growth was thus above the growth rate experienced by Nvidia&#39;s other segments, i.e., gaming, professional visualization, auto, and OEM &amp; other. On one hand, this is good news for Nvidia -- the data center business is the largest unit by far, and an above-average growth rate here means that company-wide growth is seeing a big tailwind.</p><p>On the other hand, though, Nvidia&#39;s reliance on its data center business, both when it comes to growth and to overall revenue generation in absolute terms, means NVDA could run into major issues if it were to slow down. Nvidia&#39;s other business units are not large and fast-growing enough to offset potential future headwinds in the data center business. Investors should not ignore this massive reliance on a single business unit, I believe.</p><p>Nvidia&#39;s sequential revenue growth rate was 18% in the previous quarter, and 15% during the most recent quarter. Growth thus slowed down on a sequential basis -- this trend has been intact for some time (before the 18% growth rate reported for the first quarter, Nvidia generated revenue growth of 22% in Q4). This is not overly surprising, however, as the law of large numbers dictates that a very high growth rate can&#39;t be maintained forever. Still, with the sequential growth rate slowing down meaningfully for several quarters in a row, Nvidia seems to be maturing at a substantial pace. This is even though the 15% quarterly revenue growth rate is still strong compared to most other companies -- it is just not strong compared to the growth Nvidia delivered a couple of quarters ago.</p><p>Of course, Nvidia&#39;s revenue performance is just one of several important factors when analyzing the company&#39;s quarterly report. Nvidia&#39;s profit performance is critical as well, and so is the company&#39;s guidance for the current quarter.</p><p>When it comes to profits, Nvidia generated a gross margin of 75.7% on an adjusted basis. That&#39;s excellent in absolute terms, but represents a decline compared to the previous quarter -- in Q1, Nvidia&#39;s gross margin stood at an even higher level of 78.9% (on an adjusted basis). The company&#39;s gross margin thus declined by a little more than 300 base points on a sequential basis, which is not great. While margins were up on a year-over-year basis, the year-over-year margin growth rate slowed down to around 450 base points -- it stood north of 1,000 base points a couple of quarters ago. It remains to be seen whether the gross margin dip that Nvidia experienced during the second quarter was a one-time thing, or whether margins have hit a ceiling and can&#39;t grow higher going forward. They are, after all, pretty high in absolute terms. The Blackwell ramp-up could play a role in the margin decline we have seen during the second quarter.</p><p>The good news is that operating margins continued to expand, mainly thanks to operating leverage: While operating expenses rose substantially, by more than 50%, the revenue growth rate and the gross profit growth rate were even higher than that, allowing Nvidia to expand its operating margins and to grow its profits at a strong pace. Both net income and earnings per share were up by 152% year over year, as the share count remained unchanged from the previous year&#39;s quarter -- despite hefty buyback spending. Share issuance to the company&#39;s management team and employees fully offset any share count reduction via Nvidia&#39;s buybacks, despite $15 billion being spent on buybacks during the first half of the current year alone.</p><p>Going forward, Nvidia may ramp up its buybacks even further, as the company has, as mentioned, announced a new $50 billion share repurchase authorization. But even if Nvidia were to increase its buyback pace to $50 billion a year (from the H1 pace of $30 billion a year), the share count reduction would likely be negligible. Share issuance to employees and management will continue, and for a company that is valued at more than $3 trillion, $50 billion in buybacks pencils out to just 1.5% in gross buybacks. Buybacks will thus, I believe, not be a major source of earnings per share growth. Instead, the company will continue to rely on underlying business growth and operating leverage going forward.</p><p>When it comes to business growth in the current quarter, Nvidia&#39;s guidance gives us some hints. The company forecasts revenues of $32.5 billion, plus or minus 2%. Looking at the guidance midpoint, the implied sequential growth rate is 8%. If Nvidia hits the guidance midpoint, growth will thus slow down substantially from the first half of the current year, as sequential revenue growth was 15% in Q2 and 18% in Q1. Management might try to under-promise and overdeliver, but taking the guidance at face value, growth will not be extraordinary this quarter. An 8% quarterly growth rate isn&#39;t strong compared to what Nvidia investors got used to in the recent past, which likely helps explain the share price decline following Nvidia&#39;s earnings release.</p><p>Beyond the current quarter, growth will depend on Nvidia&#39;s Blackwell to a large degree. Management&#39;s comments looked good in that regard. CEO Jensen Huang stated in the release:</p><blockquote><p><em>Hopper demand remains strong, and the anticipation for Blackwell is incredible.</em></p></blockquote><p>It is not possible to quantify what &#34;incredible&#34; anticipation will translate to when it comes to future revenue and profit generation, but the statement nevertheless is positive. Nvidia does not overpromise, thus when they are happy about what Alphabet Inc. (GOOG)(GOOGL), <a href=\"https://laohu8.com/S/META\">Meta Platforms</a>, Inc. (META), and other customers think about Blackwell, then that&#39;s a good sign, I believe.</p><h2 id=\"id_1825088861\">Is Nvidia A Good Investment?</h2><p>Nvidia continues to grow, which is hardly a surprise. But growth has slowed down compared to prior quarters, and gross margins declined during the second quarter. Nvidia&#39;s guidance for the current quarter, Q3, implies that growth will continue to slow. This is to be expected to some degree, as no company can grow at a 100% annual pace forever, but it looks like investors still were relatively unhappy about Nvidia&#39;s results and guidance.</p><p>Nvidia remains the AI data center king for now, and that won&#39;t change in the foreseeable future, I believe. But since Nvidia&#39;s shares are trading at close to 50x forward profits, and since Nvidia is valued at more than $3 trillion, the company is priced for perfection. While buying into Nvidia was an excellent choice a year ago, I&#39;m not sure that Nvidia is an excellent investment right here. Waiting for a better entry point could pay off -- Nvidia traded more than 20% lower just a couple of weeks ago, and investors were able to buy Nvidia in the $70s this spring.</p><p>With shares being very volatile, I wouldn&#39;t be surprised if a better buying opportunity emerges over the coming months. Nvidia is a strong company, but I do not believe that it trades well below fair value, which is why I give it a &#34;Neutral&#34; rating for now.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia's Guidance Is A Disappointment</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia's Guidance Is A Disappointment\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-29 11:06 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4717738-nvidia-guidance-is-a-disappointment><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia Corporation reported strong Q2 earnings, but growth has slowed compared to previous quarters, leading to a 5% drop in after-hours trading.The data center segment drove significant revenue ...</p>\n\n<a href=\"https://seekingalpha.com/article/4717738-nvidia-guidance-is-a-disappointment\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4553":"喜马拉雅资本持仓","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0080751232.USD":"富达环球多元动力基金A","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","BK4554":"元宇宙及AR概念","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","LU0158827781.USD":" ALLIANZ GLOBAL SUSTAINABILITY \"AT\" (USD) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","IE00BDRTCR15.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC A","BK4524":"宅经济概念","IE0005OL40V9.USD":"JANUS HENDERSON BALANCED \"A6M\" (USD) INC","IE00BK4W5L77.USD":"HSBC GLOBAL FUNDS ICAV US EQUITY INDEX \"HC\" (USD) ACC","LU0203202063.USD":"AB SICAV I - ALL MARKET INCOME PORTFOLIO \"A2X\" (USD) ACC","BK4543":"AI","BK4527":"明星科技股","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","IE00BK4W5M84.HKD":"HSBC GLOBAL FUNDS ICAV US EQUITY INDEX \"HC\" (HKD) ACC","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU0203201768.USD":"AB SICAV I - ALL MARKET INCOME PORTFOLIO \"AX\" (USD) INC","LU0158827948.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"A\" (USD) INC","NVDA":"英伟达","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","BK4538":"云计算","LU0069063385.USD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (USD) ACC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","BK4549":"软银资本持仓","LU0029864427.USD":"TEMPLETON GLOBAL \"A\" (USD) INC","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4548":"巴美列捷福持仓","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0238689110.USD":"贝莱德环球动力股票基金","BK4534":"瑞士信贷持仓","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0072462426.USD":"贝莱德全球配置 A2","BK4532":"文艺复兴科技持仓"},"source_url":"https://seekingalpha.com/article/4717738-nvidia-guidance-is-a-disappointment","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2463448958","content_text":"Nvidia Corporation reported strong Q2 earnings, but growth has slowed compared to previous quarters, leading to a 5% drop in after-hours trading.The data center segment drove significant revenue growth, but Nvidia's heavy reliance on this unit poses risks if it slows down.Gross margins declined sequentially, and the new $50 billion buyback authorization is unlikely to significantly impact Nvidia's share count.Nvidia remains a leader in AI data centers, but with a high valuation, waiting for a better entry point may be prudent.JHVEPhotoArticle ThesisNVIDIA Corporation (NASDAQ:NVDA) reported its most recent quarterly earnings results on Wednesday afternoon. The company beat estimates once again, but Nvidia is experiencing a growth slowdown -- while growth is still great in absolute terms, it is not as great as it was a year ago. The market's reaction was rather negative, and a new $50 billion buyback authorization didn't change that.Past CoverageI have written about Nvidia Corporation in the past. My most recent article is from May, where I covered the company's first-quarter earnings results and the stock split the company announced at the time. With one quarter having passed since then, and with Nvidia announcing its most recent quarterly earnings results today, it is time for a thesis update.What Happened?Nvidia Corporation announced its Q2 results following the market's close on Wednesday. The headline results can be seen in the following screencap from Seeking Alpha:Nvidia's quarterly earnings results (Seeking Alpha)The company delivered another double beat, relative to the analyst consensus estimate, but the magnitude of the beat wasn't as large as in some quarters in the recent past. The revenue estimate was beaten by around 4%, while the earnings per share estimate was beaten by around 6%. That's good, but not as great as the revenue and earnings per share beats of around 20% and 30%, respectively, one year ago.The market seems to be a bit disappointed, as Nvidia's shares are trading down 5% in after-hours trading at the time of writing. This could change, of course, and the share price might be different on Thursday, as investors will digest Nvidia's results and guidance over the coming hours.Nvidia's Performance During The Second QuarterNvidia generated massive revenue growth on a year-over-year basis, which was expected by everyone. Like in previous quarters, this business growth was largely driven by Nvidia's data center segment. Here, revenues were up 155% compared to the previous year's quarter, while overall revenues were up by 122% compared to one year earlier. Data center growth was thus above the growth rate experienced by Nvidia's other segments, i.e., gaming, professional visualization, auto, and OEM & other. On one hand, this is good news for Nvidia -- the data center business is the largest unit by far, and an above-average growth rate here means that company-wide growth is seeing a big tailwind.On the other hand, though, Nvidia's reliance on its data center business, both when it comes to growth and to overall revenue generation in absolute terms, means NVDA could run into major issues if it were to slow down. Nvidia's other business units are not large and fast-growing enough to offset potential future headwinds in the data center business. Investors should not ignore this massive reliance on a single business unit, I believe.Nvidia's sequential revenue growth rate was 18% in the previous quarter, and 15% during the most recent quarter. Growth thus slowed down on a sequential basis -- this trend has been intact for some time (before the 18% growth rate reported for the first quarter, Nvidia generated revenue growth of 22% in Q4). This is not overly surprising, however, as the law of large numbers dictates that a very high growth rate can't be maintained forever. Still, with the sequential growth rate slowing down meaningfully for several quarters in a row, Nvidia seems to be maturing at a substantial pace. This is even though the 15% quarterly revenue growth rate is still strong compared to most other companies -- it is just not strong compared to the growth Nvidia delivered a couple of quarters ago.Of course, Nvidia's revenue performance is just one of several important factors when analyzing the company's quarterly report. Nvidia's profit performance is critical as well, and so is the company's guidance for the current quarter.When it comes to profits, Nvidia generated a gross margin of 75.7% on an adjusted basis. That's excellent in absolute terms, but represents a decline compared to the previous quarter -- in Q1, Nvidia's gross margin stood at an even higher level of 78.9% (on an adjusted basis). The company's gross margin thus declined by a little more than 300 base points on a sequential basis, which is not great. While margins were up on a year-over-year basis, the year-over-year margin growth rate slowed down to around 450 base points -- it stood north of 1,000 base points a couple of quarters ago. It remains to be seen whether the gross margin dip that Nvidia experienced during the second quarter was a one-time thing, or whether margins have hit a ceiling and can't grow higher going forward. They are, after all, pretty high in absolute terms. The Blackwell ramp-up could play a role in the margin decline we have seen during the second quarter.The good news is that operating margins continued to expand, mainly thanks to operating leverage: While operating expenses rose substantially, by more than 50%, the revenue growth rate and the gross profit growth rate were even higher than that, allowing Nvidia to expand its operating margins and to grow its profits at a strong pace. Both net income and earnings per share were up by 152% year over year, as the share count remained unchanged from the previous year's quarter -- despite hefty buyback spending. Share issuance to the company's management team and employees fully offset any share count reduction via Nvidia's buybacks, despite $15 billion being spent on buybacks during the first half of the current year alone.Going forward, Nvidia may ramp up its buybacks even further, as the company has, as mentioned, announced a new $50 billion share repurchase authorization. But even if Nvidia were to increase its buyback pace to $50 billion a year (from the H1 pace of $30 billion a year), the share count reduction would likely be negligible. Share issuance to employees and management will continue, and for a company that is valued at more than $3 trillion, $50 billion in buybacks pencils out to just 1.5% in gross buybacks. Buybacks will thus, I believe, not be a major source of earnings per share growth. Instead, the company will continue to rely on underlying business growth and operating leverage going forward.When it comes to business growth in the current quarter, Nvidia's guidance gives us some hints. The company forecasts revenues of $32.5 billion, plus or minus 2%. Looking at the guidance midpoint, the implied sequential growth rate is 8%. If Nvidia hits the guidance midpoint, growth will thus slow down substantially from the first half of the current year, as sequential revenue growth was 15% in Q2 and 18% in Q1. Management might try to under-promise and overdeliver, but taking the guidance at face value, growth will not be extraordinary this quarter. An 8% quarterly growth rate isn't strong compared to what Nvidia investors got used to in the recent past, which likely helps explain the share price decline following Nvidia's earnings release.Beyond the current quarter, growth will depend on Nvidia's Blackwell to a large degree. Management's comments looked good in that regard. CEO Jensen Huang stated in the release:Hopper demand remains strong, and the anticipation for Blackwell is incredible.It is not possible to quantify what \"incredible\" anticipation will translate to when it comes to future revenue and profit generation, but the statement nevertheless is positive. Nvidia does not overpromise, thus when they are happy about what Alphabet Inc. (GOOG)(GOOGL), Meta Platforms, Inc. (META), and other customers think about Blackwell, then that's a good sign, I believe.Is Nvidia A Good Investment?Nvidia continues to grow, which is hardly a surprise. But growth has slowed down compared to prior quarters, and gross margins declined during the second quarter. Nvidia's guidance for the current quarter, Q3, implies that growth will continue to slow. This is to be expected to some degree, as no company can grow at a 100% annual pace forever, but it looks like investors still were relatively unhappy about Nvidia's results and guidance.Nvidia remains the AI data center king for now, and that won't change in the foreseeable future, I believe. But since Nvidia's shares are trading at close to 50x forward profits, and since Nvidia is valued at more than $3 trillion, the company is priced for perfection. While buying into Nvidia was an excellent choice a year ago, I'm not sure that Nvidia is an excellent investment right here. Waiting for a better entry point could pay off -- Nvidia traded more than 20% lower just a couple of weeks ago, and investors were able to buy Nvidia in the $70s this spring.With shares being very volatile, I wouldn't be surprised if a better buying opportunity emerges over the coming months. Nvidia is a strong company, but I do not believe that it trades well below fair value, which is why I give it a \"Neutral\" rating for now.","news_type":1},"isVote":1,"tweetType":1,"viewCount":126,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":325340852859040,"gmtCreate":1720458354857,"gmtModify":1720458358536,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/GS\"> $Goldman Sachs(GS)$ </a>big winner","listText":"<a href=\"https://ttm.financial/S/GS\"> $Goldman Sachs(GS)$ </a>big winner","text":"$Goldman Sachs(GS)$ big winner","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/325340852859040","isVote":1,"tweetType":1,"viewCount":386,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":321025855492376,"gmtCreate":1719405977822,"gmtModify":1719405981802,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"All I hear is buy and I bought more!!&nbsp;[Miser]&nbsp;&nbsp;","listText":"All I hear is buy and I bought more!!&nbsp;[Miser]&nbsp;&nbsp;","text":"All I hear is buy and I bought more!! [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/321025855492376","repostId":"2446816362","repostType":2,"repost":{"id":"2446816362","kind":"highlight","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"media_name":"Dow Jones","id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1719403260,"share":"https://ttm.financial/m/news/2446816362?lang=&edition=fundamental","pubTime":"2024-06-26 20:01","market":"other","language":"en","title":"Nvidia's stock is set to gain, with rivals seen to be in perpetual catch-up mode","url":"https://stock-news.laohu8.com/highlight/detail?id=2446816362","media":"Dow Jones","summary":"Nvidia's product cadence, software emphasis and full-system approach help extend the company's competitive moat, according to an analyst. The Nvidia Corp. stock rally has reignited, with the stock heading to a consecutive day of gains after a recent slide into correction territory.While analysts are a bullish bunch on Nvidia's stock  in terms of their ratings - three quarters rate it the equivalent of a buy - they're behind in updating their price targets to account for Nvidia's sizable post-earnings stock gains. But at least two issued target boosts ahead of Wednesday's open, including Cantor Fitzgerald's C.J. Muse, who's now the second most upbeat analyst on the stock.\"We have never seen a more-torrid pace of technology innovation and subsequent reduction in cost of compute as we are seeing today - all driven by [Nvidia] and its full-system approach,\" Muse wrote, as he lifted his price target to $175 from $140.Nvidia shares were up 2.4% in Wednesday's premarket action after rising 6.","content":"<font class=\"NormalMinus1\" face=\"Arial\">\n<p>\nMW Nvidia's stock is set to gain, with rivals seen to be in perpetual catch-up mode\n</p>\n<p>\n  By Emily Bary \n</p>\n<p>\n     Nvidia's product cadence, software emphasis and full-system approach help extend the company's competitive moat, according to an analyst \n</p>\n<p>\n     The Nvidia Corp. stock rally has reignited, with the stock heading to a consecutive day of gains after a recent slide into correction territory. \n</p>\n<p>\n     While analysts are a bullish bunch on Nvidia's stock <a href=\"https://laohu8.com/S/NVDA\">$(NVDA)$</a> in terms of their ratings - three quarters rate it the equivalent of a buy - they're behind in updating their price targets to account for Nvidia's sizable post-earnings stock gains. But at least two issued target boosts ahead of Wednesday's open, including Cantor Fitzgerald's C.J. Muse, who's now the second most upbeat analyst on the stock. \n</p>\n<p>\n     \"We have never seen a more-torrid pace of technology innovation and subsequent reduction in cost of compute as we are seeing today - all driven by [Nvidia] and its full-system approach,\" Muse wrote, as he lifted his price target to $175 from $140. \n</p>\n<p>\n     Nvidia shares were up 2.4% in Wednesday's premarket action after rising 6.8% in Tuesday's session. \n</p>\n<p>\n     See more: Nvidia's stock storms back to score a rebound not seen in three years \n</p>\n<p>\n     Muse noted that Nvidia's rivals are stuck in an \"ongoing game of catch-up,\" and with the company's \"clear technologic push at scale,\" he expects a further stock ascent. \n</p>\n<p>\n     He talked in big terms as he described Nvidia's market opportunity, which he thinks could shift from being a percentage of data-center spending to a percentage of overall information-technology spending - and eventually a percentage of gross domestic product. That's as the company pushes toward \"AI ubiquity.\" \n</p>\n<p>\n     Read: As Nvidia executives sell stock, here's what investors need to know \n</p>\n<p>\n     Muse added that there are \"numerous qualitative examples of AI implementations offering clear [profit-and-loss] benefits\" to customers, though he admitted it's not as easy to find quantitative examples since the AI-fueled technological revolution is so new. \n</p>\n<p>\n     Meanwhile, Nvidia boasts advantages through its software, full-system approach, quick product cadence and performance that Muse says reinforce the company's competitive moat. \n</p>\n<p>\n     He has an overweight rating on the stock, which he also deems a \"top pick.\" \n</p>\n<p>\n     Citi Research's Atif Malik boosted his price target as well, to $150 from $126. \n</p>\n<p>\n     He's encouraged about the future potential of \"AI agents,\" which he said are a step up from chatbots because they could make decisions and act in an autonomous fashion. \"AI agents when at [the] full potential can drive strong investment by enterprises,\" Malik wrote. \n</p>\n<p>\n     The trend is notable for Nvidia, in his view, because it could become the next frontier for AI spending, notably in the inference domain, which makes up about 40% of Nvidia's data-center sales. \n</p>\n<p>\n     Don't miss: Nvidia is one of the 'three horsemen of AI.' Here are the others. \n</p>\n<p>\n     -Emily Bary \n</p>\n<p>\n     This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. \n</p>\n<pre>\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  June 26, 2024 08:01 ET (12:01 GMT)\n</p>\n<p>\n  Copyright (c) 2024 Dow Jones &amp; Company, Inc.\n</p>\n</font>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia's stock is set to gain, with rivals seen to be in perpetual catch-up mode</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia's stock is set to gain, with rivals seen to be in perpetual catch-up mode\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2024-06-26 20:01</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<font class=\"NormalMinus1\" face=\"Arial\">\n<p>\nMW Nvidia's stock is set to gain, with rivals seen to be in perpetual catch-up mode\n</p>\n<p>\n  By Emily Bary \n</p>\n<p>\n     Nvidia's product cadence, software emphasis and full-system approach help extend the company's competitive moat, according to an analyst \n</p>\n<p>\n     The Nvidia Corp. stock rally has reignited, with the stock heading to a consecutive day of gains after a recent slide into correction territory. \n</p>\n<p>\n     While analysts are a bullish bunch on Nvidia's stock <a href=\"https://laohu8.com/S/NVDA\">$(NVDA)$</a> in terms of their ratings - three quarters rate it the equivalent of a buy - they're behind in updating their price targets to account for Nvidia's sizable post-earnings stock gains. But at least two issued target boosts ahead of Wednesday's open, including Cantor Fitzgerald's C.J. Muse, who's now the second most upbeat analyst on the stock. \n</p>\n<p>\n     \"We have never seen a more-torrid pace of technology innovation and subsequent reduction in cost of compute as we are seeing today - all driven by [Nvidia] and its full-system approach,\" Muse wrote, as he lifted his price target to $175 from $140. \n</p>\n<p>\n     Nvidia shares were up 2.4% in Wednesday's premarket action after rising 6.8% in Tuesday's session. \n</p>\n<p>\n     See more: Nvidia's stock storms back to score a rebound not seen in three years \n</p>\n<p>\n     Muse noted that Nvidia's rivals are stuck in an \"ongoing game of catch-up,\" and with the company's \"clear technologic push at scale,\" he expects a further stock ascent. \n</p>\n<p>\n     He talked in big terms as he described Nvidia's market opportunity, which he thinks could shift from being a percentage of data-center spending to a percentage of overall information-technology spending - and eventually a percentage of gross domestic product. That's as the company pushes toward \"AI ubiquity.\" \n</p>\n<p>\n     Read: As Nvidia executives sell stock, here's what investors need to know \n</p>\n<p>\n     Muse added that there are \"numerous qualitative examples of AI implementations offering clear [profit-and-loss] benefits\" to customers, though he admitted it's not as easy to find quantitative examples since the AI-fueled technological revolution is so new. \n</p>\n<p>\n     Meanwhile, Nvidia boasts advantages through its software, full-system approach, quick product cadence and performance that Muse says reinforce the company's competitive moat. \n</p>\n<p>\n     He has an overweight rating on the stock, which he also deems a \"top pick.\" \n</p>\n<p>\n     Citi Research's Atif Malik boosted his price target as well, to $150 from $126. \n</p>\n<p>\n     He's encouraged about the future potential of \"AI agents,\" which he said are a step up from chatbots because they could make decisions and act in an autonomous fashion. \"AI agents when at [the] full potential can drive strong investment by enterprises,\" Malik wrote. \n</p>\n<p>\n     The trend is notable for Nvidia, in his view, because it could become the next frontier for AI spending, notably in the inference domain, which makes up about 40% of Nvidia's data-center sales. \n</p>\n<p>\n     Don't miss: Nvidia is one of the 'three horsemen of AI.' Here are the others. \n</p>\n<p>\n     -Emily Bary \n</p>\n<p>\n     This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. \n</p>\n<pre>\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  June 26, 2024 08:01 ET (12:01 GMT)\n</p>\n<p>\n  Copyright (c) 2024 Dow Jones &amp; Company, Inc.\n</p>\n</font>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","BK4587":"ChatGPT概念","BK4527":"明星科技股","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","BK4543":"AI","NVDA":"英伟达","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","BK4550":"红杉资本持仓","LU0097036916.USD":"贝莱德美国增长A2 USD","BK4579":"人工智能","BK4585":"ETF&股票定投概念","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","BK4141":"半导体产品","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","BK4503":"景林资产持仓","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU0289961442.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"AX\" (SGD) ACC","BK4551":"寇图资本持仓","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","BK4581":"高盛持仓","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","BK4529":"IDC概念","LU0238689110.USD":"贝莱德环球动力股票基金","IE0034235295.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"A\" (USD) ACC","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0234570918.USD":"高盛全球核心股票组合Acc Close","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0072462426.USD":"贝莱德全球配置 A2","LU0079474960.USD":"联博美国增长基金A","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","BK4592":"伊斯兰概念","LU0056508442.USD":"贝莱德世界科技基金A2","LU0080751232.USD":"富达环球多元动力基金A","BK4567":"ESG概念","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","BK4588":"碎股","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0109392836.USD":"富兰克林科技股A"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2446816362","content_text":"MW Nvidia's stock is set to gain, with rivals seen to be in perpetual catch-up mode\n\n\n  By Emily Bary \n\n\n     Nvidia's product cadence, software emphasis and full-system approach help extend the company's competitive moat, according to an analyst \n\n\n     The Nvidia Corp. stock rally has reignited, with the stock heading to a consecutive day of gains after a recent slide into correction territory. \n\n\n     While analysts are a bullish bunch on Nvidia's stock $(NVDA)$ in terms of their ratings - three quarters rate it the equivalent of a buy - they're behind in updating their price targets to account for Nvidia's sizable post-earnings stock gains. But at least two issued target boosts ahead of Wednesday's open, including Cantor Fitzgerald's C.J. Muse, who's now the second most upbeat analyst on the stock. \n\n\n     \"We have never seen a more-torrid pace of technology innovation and subsequent reduction in cost of compute as we are seeing today - all driven by [Nvidia] and its full-system approach,\" Muse wrote, as he lifted his price target to $175 from $140. \n\n\n     Nvidia shares were up 2.4% in Wednesday's premarket action after rising 6.8% in Tuesday's session. \n\n\n     See more: Nvidia's stock storms back to score a rebound not seen in three years \n\n\n     Muse noted that Nvidia's rivals are stuck in an \"ongoing game of catch-up,\" and with the company's \"clear technologic push at scale,\" he expects a further stock ascent. \n\n\n     He talked in big terms as he described Nvidia's market opportunity, which he thinks could shift from being a percentage of data-center spending to a percentage of overall information-technology spending - and eventually a percentage of gross domestic product. That's as the company pushes toward \"AI ubiquity.\" \n\n\n     Read: As Nvidia executives sell stock, here's what investors need to know \n\n\n     Muse added that there are \"numerous qualitative examples of AI implementations offering clear [profit-and-loss] benefits\" to customers, though he admitted it's not as easy to find quantitative examples since the AI-fueled technological revolution is so new. \n\n\n     Meanwhile, Nvidia boasts advantages through its software, full-system approach, quick product cadence and performance that Muse says reinforce the company's competitive moat. \n\n\n     He has an overweight rating on the stock, which he also deems a \"top pick.\" \n\n\n     Citi Research's Atif Malik boosted his price target as well, to $150 from $126. \n\n\n     He's encouraged about the future potential of \"AI agents,\" which he said are a step up from chatbots because they could make decisions and act in an autonomous fashion. \"AI agents when at [the] full potential can drive strong investment by enterprises,\" Malik wrote. \n\n\n     The trend is notable for Nvidia, in his view, because it could become the next frontier for AI spending, notably in the inference domain, which makes up about 40% of Nvidia's data-center sales. \n\n\n     Don't miss: Nvidia is one of the 'three horsemen of AI.' Here are the others. \n\n\n     -Emily Bary \n\n\n     This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  June 26, 2024 08:01 ET (12:01 GMT)\n\n\n  Copyright (c) 2024 Dow Jones & Company, Inc.","news_type":1},"isVote":1,"tweetType":1,"viewCount":187,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":321024574247128,"gmtCreate":1719405948540,"gmtModify":1719407467633,"author":{"id":"3579826048216285","authorId":"3579826048216285","name":"Nyubbie","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":4,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3579826048216285","authorIdStr":"3579826048216285"},"themes":[],"htmlText":"Why buy this crap when you can buy NVDA???","listText":"Why buy this crap when you can buy NVDA???","text":"Why buy this crap when you can buy NVDA???","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/321024574247128","repostId":"2446677683","repostType":2,"repost":{"id":"2446677683","kind":"highlight","pubTimestamp":1719404760,"share":"https://ttm.financial/m/news/2446677683?lang=&edition=fundamental","pubTime":"2024-06-26 20:26","market":"fut","language":"en","title":"Why the Vanguard Information Technology ETF Is One of the Best Ways to Invest in Artificial Intelligence (AI)","url":"https://stock-news.laohu8.com/highlight/detail?id=2446677683","media":"Motley Fool","summary":"Nvidia and Microsoft are two of the ETF's largest holdings.","content":"<html><body><ul>\n<li>\n<div>\n<svg fill=\"none\" height=\"15\" viewbox=\"0 0 14 15\" width=\"14\" xmlns=\"http://www.w3.org/2000/svg\">\n<path d=\"M14 5.58984C14 2.91016 11.8398 0.75 9.16016 0.75C6.50781 0.777344 4.375 2.91016 4.375 5.5625C4.375 6.10938 4.45703 6.60156 4.59375 7.09375L0.191406 11.4961C0.0546875 11.6328 0 11.7969 0 11.9609V14.0938C0 14.4766 0.273438 14.75 0.65625 14.75H3.71875C4.07422 14.75 4.375 14.4766 4.375 14.0938V13H5.46875C5.82422 13 6.125 12.7266 6.125 12.3438V11.25H7.13672C7.30078 11.25 7.51953 11.168 7.62891 11.0312L8.28516 10.293C8.55859 10.3477 8.85938 10.375 9.1875 10.375C11.8398 10.375 14 8.24219 14 5.58984ZM9.1875 4.25C9.1875 3.53906 9.76172 2.9375 10.5 2.9375C11.2109 2.9375 11.8125 3.53906 11.8125 4.25C11.8125 4.98828 11.2109 5.5625 10.5 5.5625C9.76172 5.5625 9.1875 4.98828 9.1875 4.25Z\" fill=\"#FFB81C\"></path>\n</svg>\n</div>\n<div>The Vanguard Information Technology ETF gives investors a large amount of exposure to three of the stocks benefiting the most from AI. </div>\n</li>\n<li>\n<div>\n<svg fill=\"none\" height=\"15\" viewbox=\"0 0 14 15\" width=\"14\" xmlns=\"http://www.w3.org/2000/svg\">\n<path d=\"M14 5.58984C14 2.91016 11.8398 0.75 9.16016 0.75C6.50781 0.777344 4.375 2.91016 4.375 5.5625C4.375 6.10938 4.45703 6.60156 4.59375 7.09375L0.191406 11.4961C0.0546875 11.6328 0 11.7969 0 11.9609V14.0938C0 14.4766 0.273438 14.75 0.65625 14.75H3.71875C4.07422 14.75 4.375 14.4766 4.375 14.0938V13H5.46875C5.82422 13 6.125 12.7266 6.125 12.3438V11.25H7.13672C7.30078 11.25 7.51953 11.168 7.62891 11.0312L8.28516 10.293C8.55859 10.3477 8.85938 10.375 9.1875 10.375C11.8398 10.375 14 8.24219 14 5.58984ZM9.1875 4.25C9.1875 3.53906 9.76172 2.9375 10.5 2.9375C11.2109 2.9375 11.8125 3.53906 11.8125 4.25C11.8125 4.98828 11.2109 5.5625 10.5 5.5625C9.76172 5.5625 9.1875 4.98828 9.1875 4.25Z\" fill=\"#FFB81C\"></path>\n</svg>\n</div>\n<div>The ETF has a strong record over the past decade. </div>\n</li>\n<li>\n<div>\n<svg fill=\"none\" height=\"15\" viewbox=\"0 0 14 15\" width=\"14\" xmlns=\"http://www.w3.org/2000/svg\">\n<path d=\"M14 5.58984C14 2.91016 11.8398 0.75 9.16016 0.75C6.50781 0.777344 4.375 2.91016 4.375 5.5625C4.375 6.10938 4.45703 6.60156 4.59375 7.09375L0.191406 11.4961C0.0546875 11.6328 0 11.7969 0 11.9609V14.0938C0 14.4766 0.273438 14.75 0.65625 14.75H3.71875C4.07422 14.75 4.375 14.4766 4.375 14.0938V13H5.46875C5.82422 13 6.125 12.7266 6.125 12.3438V11.25H7.13672C7.30078 11.25 7.51953 11.168 7.62891 11.0312L8.28516 10.293C8.55859 10.3477 8.85938 10.375 9.1875 10.375C11.8398 10.375 14 8.24219 14 5.58984ZM9.1875 4.25C9.1875 3.53906 9.76172 2.9375 10.5 2.9375C11.2109 2.9375 11.8125 3.53906 11.8125 4.25C11.8125 4.98828 11.2109 5.5625 10.5 5.5625C9.76172 5.5625 9.1875 4.98828 9.1875 4.25Z\" fill=\"#FFB81C\"></path>\n</svg>\n</div>\n<div>Its performance is driven by Apple as well. </div>\n</li>\n</ul><div><p>If you are looking to invest in technology stocks, and in particular some of the tech companies most set to benefit from artificial intelligence (AI), the <strong>Vanguard Information Technology ETF</strong> <span>(VGT<span> 1.43%</span>)</span> is a strong option to consider.</p><p>The exchange-traded fund (ETF) tracks the MSCI U.S. Investable Market Information Technology 25/50 Index, which includes companies involved in cloud computing, semiconductors, data centers, and communication equipment such as smartphones and computers, among other areas.</p><div><app :collapse_on_load=\"false\" :instrument_id=\"221809\" :show_benchmark_compare=\"false\" amount_change=\"8.12\" average_volume=\"\" company_name=\"Vanguard World Fund - Vanguard Information Technology ETF\" current_price=\"575.26\" daily_high=\"575.41\" daily_low=\"568.43\" default_period=\"FiveYear\" dividend_yield=\"N/A\" exchange=\"NYSEMKT\" fifty_two_week_high=\"593.10\" fifty_two_week_low=\"397.76\" gross_margin=\"0.00\" logo=\"https://g.foolcdn.com/art/companylogos/mark/VGT.png\" market_cap=\"\" pe_ratio=\"\" percent_change=\"1.43\" symbol=\"VGT\" volume=\"1,880\"></app></div><h2>A strong track record</h2><p>The Information Technology ETF has a strong track record with an average annual return of 20.3% over the past decade, as of the end of May. That equates to a cumulative return of nearly 535% during that stretch. As such, a $10,000 investment made 10 years ago would now be worth nearly $63,500.</p><p>Returns have been even stronger more recently, with an annual average return of 23.5% over the last five years and 29.1% over the past year.</p><p>The ETF also comes with a scant 0.10% expense ratio. This means that the management fees on that $10,000 investment would be only $10. </p><div><div></div></div><h2>A top-heavy portfolio</h2><p>The Vanguard ETF is heavily weighted in its top three holdings, all of which look poised to be among the biggest long-term beneficiaries of AI.</p><p>At the end of May, <strong>Nvidia</strong> <span>(NVDA<span> 6.76%</span>)</span> was the ETF's third-largest holding at 14% of its portfolio. With the company taking over the spot as the largest company in the world recently, though, I wouldn't be surprised if it has become its top holding given the stock's recent performance.</p><p>Nvidia has been the biggest beneficiary of the AI boom thus far, with the company's graphic processing units (GPUs) the backbone of the AI infrastructure buildout. As companies race to build out new AI models, its chips are essential for training large language models (LLMs) and inference.</p><p>The company has been able to create a wide moat with its Compute Unified Device Architecture (CUDA), the software platform on which most developers have been taught to program GPU chips.</p><div><div></div></div><p>Its incredible growth should slow due to the law of large numbers, but Nvidia still looks poised to continue to be an AI winner given that its technology has become the de facto standard in the industry.</p><p>The ETF's second-largest holding at the end of May was <strong>Apple</strong> <span>(AAPL<span> 0.45%</span>)</span>, at 15.9% of its portfolio. It has struggled to grow revenue over the past year, but the company looks set to start benefiting from AI soon.</p><p>Apple is typically not a business on the leading edge of technology, but while it might not be the first to market with its devices, they often end up being among the best.</p><p>The iPhone maker recently introduced a number of AI features to run on its new Apple Intelligence platform that will be coming to the operating systems of its smartphones, tablets, and computers. These advances, which need newer technology to run on, should help lead to a hardware upgrade cycle that will power the company and its stock. </p><div><div></div></div><p>The top holding in the ETF at the end of May was <strong>Microsoft</strong> <span>(MSFT<span> 0.73%</span>)</span>, at 16.7%. It was one of the first megacap tech companies to embrace AI through its large investment in OpenAI.</p><p>The company's cloud computing unit, Azure, has been the biggest beneficiary of this move thus far, as customers build their own AI applications using its platform. Its consumption-based model helped lead to 31% growth in the segment last quarter.</p><p>It has also seen other areas of its business start to benefit from its AI assistant Copilot, which has powered growth for its developer platform GitHub and Microsoft 365. </p><div><img loading=\"lazy\" src=\"https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F781318%2Fgettyimages-1402452876.jpg&amp;op=resize&amp;w=700\" srcset=\"https://g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/781318/gettyimages-1402452876.jpg&amp;w=300&amp;op=resize 300w, https://g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/781318/gettyimages-1402452876.jpg&amp;w=1000&amp;op=resize 1000w, https://g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/781318/gettyimages-1402452876.jpg&amp;w=2000&amp;op=resize 2000w\"/><p>Image source: Getty Images.</p></div><h2>Is it time to buy this ETF?</h2><p>For investors looking to start investing in AI, the Vanguard Information Technology ETF is a great option. Nvidia, Microsoft, and Apple combined made up 46.6% of the ETF's holding as of the end of last month. As those three stocks move, so will the ETF -- and they all look set to continue benefiting from AI.</p><div><div></div></div><p>And they are not the only stocks among the ETF's top holdings that can make that claim. <strong>Broadcom</strong>, <strong>Advanced Micro Devices</strong>, <strong>Qualcomm</strong>, and <strong><a href=\"https://laohu8.com/S/ADBE\">Adobe</a></strong> are also in that group.</p><p>With AI still in its early innings, now looks like a good time to add the Vanguard Information Technology ETF to your portfolio.</p><div></div></div></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why the Vanguard Information Technology ETF Is One of the Best Ways to Invest in Artificial Intelligence (AI)</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; 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.h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy the Vanguard Information Technology ETF Is One of the Best Ways to Invest in Artificial Intelligence (AI)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-26 20:26 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/06/26/why-the-vanguard-information-technology-etf-is-one/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The Vanguard Information Technology ETF gives investors a large amount of exposure to three of the stocks benefiting the most from AI. \n\n\n\n\n\n\n\nThe ETF has a strong record over the past decade. \n\n\n\n\n\n\n...</p>\n\n<a href=\"https://www.fool.com/investing/2024/06/26/why-the-vanguard-information-technology-etf-is-one/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F781318%2Fgettyimages-1402452876.jpg&op=resize&w=165&h=104","relate_stocks":{"GB00B4LPDJ14.GBP":"FUNDSMITH EQUITY \"R\" (GBP) ACC","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","LU0061474960.USD":"天利环球焦点基金AU Acc","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","BK4567":"ESG概念","BK4534":"瑞士信贷持仓","FDN":"First Trust Dow Jones Internet I","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","NVDA":"英伟达","BK4566":"资本集团","IE0004445015.USD":"JANUS 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(USD) ACC","BK4548":"巴美列捷福持仓","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","IE0034235295.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"A\" (USD) ACC","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","LU0079474960.USD":"联博美国增长基金A","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","BK4516":"特朗普概念","BK4554":"元宇宙及AR概念","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","AI":"C3.ai, Inc.","BK4515":"5G概念","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC"},"source_url":"https://www.fool.com/investing/2024/06/26/why-the-vanguard-information-technology-etf-is-one/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2446677683","content_text":"The Vanguard Information Technology ETF gives investors a large amount of exposure to three of the stocks benefiting the most from AI. \n\n\n\n\n\n\n\nThe ETF has a strong record over the past decade. \n\n\n\n\n\n\n\nIts performance is driven by Apple as well. \n\nIf you are looking to invest in technology stocks, and in particular some of the tech companies most set to benefit from artificial intelligence (AI), the Vanguard Information Technology ETF (VGT 1.43%) is a strong option to consider.The exchange-traded fund (ETF) tracks the MSCI U.S. Investable Market Information Technology 25/50 Index, which includes companies involved in cloud computing, semiconductors, data centers, and communication equipment such as smartphones and computers, among other areas.A strong track recordThe Information Technology ETF has a strong track record with an average annual return of 20.3% over the past decade, as of the end of May. That equates to a cumulative return of nearly 535% during that stretch. As such, a $10,000 investment made 10 years ago would now be worth nearly $63,500.Returns have been even stronger more recently, with an annual average return of 23.5% over the last five years and 29.1% over the past year.The ETF also comes with a scant 0.10% expense ratio. This means that the management fees on that $10,000 investment would be only $10. A top-heavy portfolioThe Vanguard ETF is heavily weighted in its top three holdings, all of which look poised to be among the biggest long-term beneficiaries of AI.At the end of May, Nvidia (NVDA 6.76%) was the ETF's third-largest holding at 14% of its portfolio. With the company taking over the spot as the largest company in the world recently, though, I wouldn't be surprised if it has become its top holding given the stock's recent performance.Nvidia has been the biggest beneficiary of the AI boom thus far, with the company's graphic processing units (GPUs) the backbone of the AI infrastructure buildout. As companies race to build out new AI models, its chips are essential for training large language models (LLMs) and inference.The company has been able to create a wide moat with its Compute Unified Device Architecture (CUDA), the software platform on which most developers have been taught to program GPU chips.Its incredible growth should slow due to the law of large numbers, but Nvidia still looks poised to continue to be an AI winner given that its technology has become the de facto standard in the industry.The ETF's second-largest holding at the end of May was Apple (AAPL 0.45%), at 15.9% of its portfolio. It has struggled to grow revenue over the past year, but the company looks set to start benefiting from AI soon.Apple is typically not a business on the leading edge of technology, but while it might not be the first to market with its devices, they often end up being among the best.The iPhone maker recently introduced a number of AI features to run on its new Apple Intelligence platform that will be coming to the operating systems of its smartphones, tablets, and computers. These advances, which need newer technology to run on, should help lead to a hardware upgrade cycle that will power the company and its stock. The top holding in the ETF at the end of May was Microsoft (MSFT 0.73%), at 16.7%. It was one of the first megacap tech companies to embrace AI through its large investment in OpenAI.The company's cloud computing unit, Azure, has been the biggest beneficiary of this move thus far, as customers build their own AI applications using its platform. Its consumption-based model helped lead to 31% growth in the segment last quarter.It has also seen other areas of its business start to benefit from its AI assistant Copilot, which has powered growth for its developer platform GitHub and Microsoft 365. Image source: Getty Images.Is it time to buy this ETF?For investors looking to start investing in AI, the Vanguard Information Technology ETF is a great option. Nvidia, Microsoft, and Apple combined made up 46.6% of the ETF's holding as of the end of last month. As those three stocks move, so will the ETF -- and they all look set to continue benefiting from AI.And they are not the only stocks among the ETF's top holdings that can make that claim. Broadcom, Advanced Micro Devices, Qualcomm, and Adobe are also in that group.With AI still in its early innings, now looks like a good time to add the Vanguard Information Technology ETF to your portfolio.","news_type":1},"isVote":1,"tweetType":1,"viewCount":180,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}