The Financial Results Thread

[Harlequin]

Its part of the flaw in the system, IMO, you invest in a company you expect a return, why else would you do it?

For that company to keep giving investors their return they have to keep growing how much money they generate, not just make money, but keep increasing how much of it they make.
They can do that by growing their customer base, eventually there is no where left to grow in to, then what? Well then you start cutting costs to increase your margins, you've cut to the bone, now what? You increase your margins by pushing prices up, at that point you might start to look a bit deranged in trying to justify that to your consumers, sound familiar?

All the while investors never stop wanting more.

^^ Capitalism 101 - and that growing is a minimum of 5% , the same as supermarkets profit margins

 

[brostradamus]

Kind of get the feeling there's to much money in stocks like Nvidia to allow it to fail, the ratios just make no sense.

For 2023 Nvidia turned over $27b and made a net profit of $4.2b. There share price as of right now is 390.96 per share with 2.47b of outstanding shares available, giving an earnings per share of $1.7 each, divide the share price by the earnings per share and the ratio is 231 (for scale a company like Tesco it has a PE ratio of 27, HSBC is 7, Meta/Facebook 27 all of whom make similar or bigger profits then Nvidia).

For Nvidia's current valuation to make sense they would need to increase their revenue base of $27b to $121b in 5 years (by 2028) and maintain a 15.5% net profit margin (BTW that assumes the share price remains static which realistically it won't) which will generate net profits of around $18.7b per year.

I don't know how long investors think it will take Nvidia to achieve those goals, but do they really price shares that far in advance? Given a lot of hyperscalers are building out their own custom solutions seems kind of risky but then this goes back to my first point about being to high to allow it to fail.

you'd typically look at forward multiples, investors generally rely on 1 to 3 yr forward consensus estimates while comparing multiples. i no longer work on the sell-side but if you have access to a bloomberg terminal you should be able to obtain consensus estimates. also EV/EBITDA (or EV/NOPAT, forward estimates) is a more meaningful measure especially since it normalizes for cash and other non-operating assets.. i guess you ought to look at a wide range of metrics before you could conclude that the stock is not fairly valued, though it might look so but no harm in eliminating all possibilities.. also, since cyclicality of cash flows varies by industry type the comparison should be limited to a peerset

edit:

NVIDIA Corporation (NVDA) Stock Price | Stock Quote Nasdaq - MarketScreener

NVIDIA Corporation (NVDA.NASDAQ): Stock quote, stock chart, quotes, analysis, advice, financials and news for Stock NVIDIA Corporation | Nasdaq: NVDA | Nasdaq

www.marketscreener.com

the development is interesting, looks like 2023 was a blip

 

[Freddie1980]

NVIDIA Reports Q2 FY2024 Earnings: $13B Revenue Blows Past Records On Absurd Data Center Demand

www.anandtech.com

For the second quarter of their 2024 fiscal year, NVIDIA booked $13.5 billion in revenue, which is a 101% increase over the year-ago quarter. The company has, at this point, shaken off the broader slump in technology spending on the back of an explosion in demand for their data center products, and to a lesser extent the latest generation of their consumer GeForce graphics products. As a result, this is a quarter for the record books, as NVIDIA has set new records for everything from revenue to net income.

 

[uscool]

R.I.P gamers

 

[CAT-THE-FIFTH]

R.I.P gamers

 

[Grim5]

Nvidia wins top performing stock for 2023

Nvidias share price is up 234% in 2023, making it the best performing S&P500 stock of 2023

Nvidia is the best performing S&P 500 stock in 2023. These hedge funds sold shares last quarter to take profits.

Nvidia's gains may have come too far too fast for some investors as hedge funds tied to Dan Loeb, George Soros, and Stanley Druckenmiller sold shares.

markets.businessinsider.com

 

[Freddie1980]

Give credit where credits due Nvidia have knocked it out park with their financials this year.

 

[AthlonXP1800]

NVIDIA Announces Q3-FY24 Results; Earns 5 Times More Revenue from AI Chips than Gaming GPUs

NVIDIA (NASDAQ: NVDA) today reported revenue for the third quarter ended October 29, 2023, of $18.12 billion, up 206% from a year ago and up 34% from the previous quarter. GAAP earnings per diluted share for the quarter were $3.71, up more than 12x from a year ago and up 50% from the previous...

www.techpowerup.com

Nvidia announced record revenue $18.120bn for Q3 2023.

 

[Harlequin]

Nvidia have a huge backlog on AI chips orders , IIRC the talking heads are saying gaming will continue to slide on the importance scale (and prices rise) as supply is used in more profitable markets.

Profit margin for Nvidia is now at 75%

 

[JediFragger]

Profit margin for Nvidia is now at 75%

Leather jacket producers around the world rejoice!!

 

[gpuerrilla]

...the talking heads are saying gaming will continue to slide on the importance scale (and prices rise) as supply is used in more profitable markets.

Profit margin for Nvidia is now at 75%

But but what about the miners..

 

[CAT-THE-FIFTH]

Nvidia have a huge backlog on AI chips orders , IIRC the talking heads are saying gaming will continue to slide on the importance scale (and prices rise) as supply is used in more profitable markets.

Profit margin for Nvidia is now at 75%

Yet they are releasing the Super range. So Nvidia probably knows something we don't(actually it is quite obvious).

They wouldn't be selling larger chips(or more enabled ones) for less money otherwise.

 

[NZXT30]

The numbers are indeed eye watering but the expectations even more so. All it will take is a blip in the AI craze the stock will collapse like a house of cards.

 

[Harlequin]

Yet they are releasing the Super range. So Nvidia probably knows something we don't(actually it is quite obvious).

They wouldn't be selling larger chips(or more enabled ones) for less money otherwise.

Likely the super are simply harvested ones from higher specs which cant make the grade, save on ewaste - sell them to the gamers!

 

[CAT-THE-FIFTH]

Likely the super are simply harvested ones from higher specs which cant make the grade, save on ewaste - sell them to the gamers!

The SKUs are upgrades in TOPS performance over the older ones. There is a bit of Geopolitics which is coming into play which wasn't the case a year ago.

 

[Grim5]

Now I know why amd can sell CPUs so cheap

They are operating with a 4% gross margin.
Radeon operates with an average gross margin of 16% and Ryzen 4%

 

[Harlequin]

And Nvidia are pushing to have an 80% gross margin

 

[humbug]

Now I know why amd can sell CPUs so cheap

They are operating with a 4% gross margin.
Radeon operates with an average gross margin of 16% and Ryzen 4%

Interesting, client is OEM's, prebuilds, AMD are obviously giving those away to try and compete with Intel in that space.

AMD's client market share is tiny, that chart is also unintentionally, i'm sure, misleading, "Ryzen" isn't solely "Client" and "Radeon" soley "Gaming" the way AMD publish these things is intentionally cryptic, there are Ryzen CPU, APU's and dGPU in "Client" and Ryzen CPU's, APU's and Radeon GPU's in "Gaming" i think Gaming is retail, AMD publish results by segment rather than by product type to hide loss making products, for Client that's CPU's and for Gaming that's dGPU's.

 

[humbug]

I'll add to that, AMD margins are 47%, so 29%, 4%, 16% and 44% don't tell the whole story. or something is off with that chart.

 

[CAT-THE-FIFTH]

I'll add to that, AMD margins are 47%, so 29%, 4%, 16% and 44% don't tell the whole story. or something is off with that chart.

The client margins are probably including the excess stock AMD has had to sell off due to Pandemic overproduction.

This is why AM4 CPUs are so cheap currently,especially to PC makers.