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NVDA chart courtesy of StockCharts.Com, annotations by Mish

Blowout Earnings

Last night Nvidia Reported Blowout Earnings that exceeded all analyst estimates.  

• Quarterly revenue of $7.19 billion, up 19% from previous quarter
• Record Data Center revenue of $4.28 billion
• Second quarter fiscal 2024 revenue outlook of $11.00 billion

That was easily enough to blow shorts out of the water.

Good, Bad and Ugly

• Nvdia reported revenue for the first quarter ended April 30, 2023, of $7.19 billion, down 13% from a year ago and up 19% from the previous quarter.
• GAAP earnings per diluted share for the quarter were $0.82, up 28% from a year ago and up 44% from the previous quarter. 
• Non-GAAP earnings per diluted share were $1.09, down 20% from a year ago and up 24% from the previous quarter.

That's quite the jump for performance that is down 13 percent from a year ago. But if you wish to focus on the positive, GAAP earnings are up 28 percent from a year ago.

 Spotlight AI

“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Jensen Huang, founder and CEO of NVIDIA.

“A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.

“Our entire data center family of products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production. We are significantly increasing our supply to meet surging demand for them,” he said.

Headed for a Record?

The Wall Street Journal notes "If the gains hold through Thursday trading, the graphics-chip maker could beat Amazon for the largest one-day gain in market capitalization of any U.S. company. It would need to close at $382.82 or higher to surpass Amazon’s record on Feb. 4, 2022."

It would need to close at $404.86 or higher to reach a market cap of $1 trillion

Neither happened. 

Cathy Wood Dumped NVDA in February

On the humorous side, Bloomberg reports Cathie Wood’s ARKK Dumped Nvidia Stock Before $560 Billion Surge

Wood said Nvidia's valuation was ‘very high’ in February. She dumped NVDA from her flagship ARKK ETF but did hold it in much smaller amounts in other portfolios.

NVDA PE

Ycharts says NVIDIA PE Ratio 221.78 for May 25, 2023.

NVDA is certainly not a value play. 

Technically Speaking

Technically speaking, I note two enormous gaps that I expect will fill. 

Gaps occur when a stock opens above the high of the previous day or below the low of the previous day, and stays there for the whole session. 

The two gaps on the lead chart are both enormous.

My comments are not a recommendation to short. Story stocks can get even more extreme before they crumble. It's generally a mistake to short on valuation. 

At the same time, I ask: What will NVDA do for an encore with a PE in the stratosphere?

Meanwhile, party on dudes. 

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