Nvidia -- NVDA -- Twelve Hours Later -- August 29, 2024

Locator: 48478NVDA.

All about tech, right now. 

Most important: AAPL, NVID, CRM.

Apple (AAPL) news here. (pending)

Over on twitter: Evan, Giovanni Staunovo, and EconomyApp.

Start here. 

First two charts, Nvidia, link here:

• 2Q25: look at those incredible margins and other data points, from left to right:
• largest revenue center, "Data Center": $26.3 billion; grew 16% q/q
• revenue: $30.08 billion; grew 15% q/q
  
• gross profit: $22.6 billion; grew 3pp q/q; 75% margin;
• operating profit: $18.6billion; grew 3pp q/q; 62% margin;
• net profit: $16.6 billion; grew 2pp q/q; 55% margin;

From yesterday:

• 1Q25: look at those incredible margins and other data points, from left to right:
• largest revenue center, "Data Center": $22.6 billion; grew 23% q/q
• revenue: $26.08 billion; grew 18% q/q
  
• gross profit: $20.4 billion; grew 2pp q/q; 78% margin;
• operating profit: $16.9 billion; grew 3pp q/q; 65% margin;
• net profit: $14.9 billion; grew 2pp q/q; 75% margin;
  

Salesforce, link here: 

• 2Q25: compare CRM margins below with NVDA margins above (spoiler alert: there's simply no comparison) and other data points, from left to right:
  
• subscription and support: $8.8 billion; grew 9% y/y;
• five revenue centers: each $1 billion to $2 billion; each grew about 10% y/y;
• revenue: $9.3 billion; grew 8% q/q
  
• gross profit: $7.2 billion; grew 1pp q/q; 77% margin;
• operating profit: $1.88 billion; grew 2pp q/q; 19% margin;
• net profit: $1.4 billion; grew 1pp q/q; 15% margin;

Now, conventional comparison, CRM vs NVDA:

CRM, p/e = 46.54

NVDA, forward p/e = 40; current p/e = 74:

NVDA vs CRM: 

Summary of Nvidia's Earnings Call 

Link here.

Positives: - Record Revenue Growth: NVIDIA reported a record revenue of $30 billion for Q2, a 15% sequential increase and a remarkable 122% year-on-year growth, significantly surpassing the expected $28 billion. - Strong Data Center Performance: Data Center revenue reached $26.3 billion, up 16% sequentially and 154% year-on-year, driven by robust demand for NVIDIA's Hopper architecture and networking platforms, particularly in generative AI applications. - Innovative Product Pipeline: The anticipation for the upcoming Blackwell platform is high, with expectations of several billion dollars in revenue from Blackwell in Q4. The platform promises significant improvements in performance and efficiency. - Diverse Customer Base: NVIDIA's customer base is expanding, with strong demand from cloud service providers, consumer internet companies, and enterprises across various sectors, including healthcare and automotive. - Growing Software Revenue: NVIDIA's AI Enterprise platform is gaining traction, with expectations to approach a $2 billion annual run rate by year-end, indicating strong growth in software and services.

Negatives: - Gross Margin Pressure: Gross margins decreased slightly due to a higher mix of new products and inventory provisions for low-yielding Blackwell materials, with expectations of continued pressure as new products ramp up. - Competitive Market in China: While Data Center revenue in China grew, the market remains competitive, and NVIDIA faces challenges due to export controls affecting its operations in the region. - Increased Operating Expenses: Operating expenses are expected to grow in the mid- to upper 40% range as NVIDIA invests in developing next-generation products, which may impact profitability in the short term. - Transition Challenges: The shift from Hopper to Blackwell may present challenges in terms of customer readiness and integration, particularly with the adoption of liquid cooling technologies.  

Overall: NVIDIA's earnings call highlighted strong financial performance and growth prospects driven by innovation in AI and accelerated computing, while also acknowledging challenges related to margins and competitive pressures.

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Disclaimer
Briefly Reminder 

• I am inappropriately exuberant about the US economy and the US market.
• I am also inappropriately exuberant about all things Apple. 
• See disclaimer. This is not an investment site. 
• Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 
• Reminder: I am inappropriately exuberant about the US economy and the US market.
• I am also inappropriately exuberant about all things Apple. 
• And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia. 

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Nvidia's 2Q Revenue and Net Income For Every 2Q Since Going Public

Link here.

The link has revenue and income data going all the way back to 1999. I will post only income data for past few years:

Net income: