This is an excerpt from this morning’s briefing, which you can do sign up To receive in your inbox every morning:
Nothing could get Nvidia (NVDA) stock strong over the weekend, two days after its much-awaited earnings.
Founder and CEO Jensen Huang doesn’t do three TV interviews on earnings day in his iconic leather motorcycle jacket. The usual glossy Wall Street analysts don’t report where you’d think 61 sell-side analysts are somehow related to Huang.
Not even what I argued in live post earnings shows on my X account Nvidia’s quarter and guide was an old school hit.
More digging into Nvidia’s report:
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About $60 billion remains in its share repurchase plan (thanks, 10-K). Likely to be used by Nvidia for post-earnings purchases.
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A paper gain of about $11 billion on its investment in struggling Intel (thanks, 10-K)
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Current quarter revenue outlook is $6 billion ahead of consensus. It was a big reset for expectations.
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Income growth is accelerating (see chart below).
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Profit margins improve accordingly.
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“Demand for accounting is skyrocketing,” says CEO Jensen Huang.
“Generation growth in inspirational value,” said Wall Street tech analyst I Follow in a client note.
What am I missing here at Nvidia?
Obviously, the future is hot the catalyst.
“There is no catalyst,” Melissa Otto, head of outlook alpha research at S&P Global, said of the opening bid (see video above).
I thought about this more after the show ended, and Otto has a point.
Nvidia’s investor base knows basically everything that’s coming from the company in terms of new chips. It recognizes the story of the creation of AI capex that drives Nvidia’s business. It is known that Huang will always be high. It turns out that Huang is all into humanoids and self-driving cars.
And at the end of the day, how much more Nvidia stock can retail and institutional investors own at this point? It already likely makes up a large portion of the portfolio!
So what is this unexpected positive surprise for Nvidia? There is no understanding! If I had to guess, it’s a buzz-bang product from the recently acquired Groq that will be unveiled at the company’s big GTC event next month.
If you have an idea about the next upside catalyst for Nvidia, hit me up at X – I’m all ears.
Brian Suzy He is an executive director of Yahoo Finance and a member of Yahoo Finance’s institutional leadership team. Follow Suzy in X @BrianSozzi, Instagramand LinkedIn. Tips on the story? Email brian.sozzi@yahoofinance.com.
