November 20, 2024 22:49 GMT
EQUITIES: Nvidia Results, Earnings Beat, Staggering Blackwell Demand
EQUITIES
Earnings Summary:
- Nvidia reported Q3 revenue of $35.1b, exceeding the consensus estimate of $33.25b, driven by strong data center revenue of $30.8b vs. $29.14b est, and gaming revenue of $3.3b vs. $3.06b est, Adjusted EPS was $0.81, beating expectations of $0.74, with an adjusted gross margin of 75%, matching estimates. For Q4, Nvidia guided revenue at $37.5b (±2%), slightly above the $37.1b consensus, with an adjusted gross margin forecast of 73%-74%.
- The company highlighted robust demand for its upcoming Blackwell chips, set for initial shipments in Q4 FY2025, and noted ongoing supply constraints for both Hopper and Blackwell systems. While the results were strong, the market perceived Q4 guidance as underwhelming relative to Nvidia's historically aggressive growth trajectory.
Key Headlines:
HOPPER, BLACKWELL SYSTEMS HAVE SOME SUPPLY CONSTRAINTS
NVIDIA BLACKWELL PRODUCTION SHIPMENTS TO BEGIN IN 4Q OF FY2025
NVIDIA CFO SAYS BLACKWELL DEMAND IS STAGGERING
Market Reaction:
- Post-Earnings Decline: Nvidia shares fell 5% in after-hours trading following the earnings release, though the decline moderated as trading progressed. The reaction was attributed to Q4 revenue guidance seen as "light" against high expectations. The Nasdaq initial pared the late gains in the index, however as Nvidia recovered so did Nasdaq futures and we last trade just 0.10% lower.
- Sector Impact: The broader tech sector experienced a spillover effect, with stocks like Palantir, Super Micro Computer, and Palo Alto Networks trading lower post-market.
- Outlook for Nvidia: The stock remains a key pillar for the S&P 500, of the 76 analysts covering the stock on BBG, there are only 2 sell recommendations, with 6 holds and 68 buys however the consensus show just a modest projected 12-month target price increase to 158.90 (+8.9%).
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