Is Nvidia A Buy Ahead of Q3 24 Earnings?
πππThe US markets were down this week after comments from Feds Chairman Jerome Powell said that he was in no hurry to cut interest rates. With earnings season wrapping up, Nvidia $NVIDIA Corp(NVDA)$
A disappointing outlook from Semiconductor equipment maker Applied Materials has caused the chip sector to fall last week. Applied Materials $Applied Materials(AMAT)$
iShares Semiconductor ETF $iShares Semiconductor ETF(SOXX)$ fell 3.2% on Friday.
Analysts polled by FactSet expect Nvidia's sales to rise 82% year over year to USD 33.06 billion in the 3rd quarter. They see earnings increasing 88% to 75 cents per share.
However Nvidia's Q4 guidance will be critical since it will include the 1st quarter of sales of Nvidia's next generation AI processor called Blackwell. Wall Street is currently expecting earnings of 82 cents per share, up 58% year over year on sales of USD 36.94 billion, up 67% for Nvidia's fiscal 4th quarter.
CEO Jensen Huang has said that the demand for Blackwell is insane. The Blackwell chip is in high demand from companies like OpenAI, Microsoft, Meta and other firms building AI data centers.
Blackwell delivers 2.5 times the performance of Nvidia's Hopper Chips. There is concern whether Nvidia can get enough supply from its contract manufacturer TSMC and system assembler Foxconn and Quanta.
Nvidia has already announced its next GPU architecture called Rubin which is scheduled for 2026.
Data center expansion is the most important driver to Nvidia's Earnings and valuation due to the significant increase in AI spending by large cloud computing and Internet companies. These firms have signaled that they do not expect AI spending to slow down in 2025.
Apart from Big Tech, enterprise spending by software vendors, financial services companies, healthcare firms, EV Automakers are an important factor that will affect Nvidia's Earnings. Donald Trump re election as US President may affect chip industry spending and government restrictions. Investors will be keen to find out what action that Nvidia will take on this issue.
Nvidia has catapulted to be the most valuable publicly traded company in the world with a market capitalisation of USD 3.48 Trillion. Its share price has been on a tear and is up a huge 194% year todate. In 2023, Nvidia has skyrocketed 187%.
The question is can Nvidia continue its breath taking upward trajectory?
I believe Nvidia can and will continue to grow exponentially in the future. The answer lies in its dominant position as the most advanced chip company with a market share of over 90%.
Nvidia has been expanding rapidly overseas as well. The latest news is that Nvidia has signed a partnership with Softbank at Nvidia AI Summit in Japan with the aim to make Japan a global AI leader by integrating AI across various industries.
Softbank's telecom division is building Japan's most powerful AI supercomputer, powered by cutting edge Nvidia Blackwell chips. The new supercomputer will be the first to utilise Nvidia SGX B200 systems which are designed to fast track AI driven initiatives across Japan and targeted at sectors like healthcare, telecommunications and manufacturing.
Softbank also announced plans for a next generation supercomputer using the Grace Blackwell platform, optimised for AI and high performance computing with expanded memory capacity.
Nvidia is also working with India to develop a custom AI Chip for use in India Railways ' safety systems as well as fostering AI ecosystems in emerging markets like Vietnam and Indonesia.
In Singapore Singtel has chosen Nvidia AI platform to deliver Generative AI to its regional customers. In Malaysia, Nvidia is working with YTL AI Cloud to bring a world class accelerated computing platform to South East Asia. This will drive scientific research, innovation and economic growth across the region. Nvidia has made a decision to invest RM 20 billion in Malaysia and launched South East Asia 's first GPU Research & Development and Compute Solution Center in Malaysia.
Jensen Huang has said that AI is the beginning of a new industrial revolution. The next wave of AI will be physical AI. This is where Robotics Technologies will interact with and shape the physical world.
Wall Street Analysts are bullish on Nvidia with a Strong Buy, with an Average Target price of USD 163.26, an upside potential of 14% according to Tipranks.
I am really thrilled with the quantum leap that Nvidia is making in new technologies and can envisage a future where AI is very much part of our lives. That is why I am so glad that I have invested in Nvidia and will continue to dollar cost average into this phenomenonal company.
This is just the beginning of the AI revolution and Nvidia is THE COMPANY to invest in as it is the Nucleus of the AI revolution!
@Daily_Discussion @TigerStars @Tiger_comments @MillionaireTiger @CaptainTiger
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