In Nvidia❼past three quarters, revenue has more than tripled on an annual basis, with the vast majority of growth coming from the data center business.
Analysts expect a fourth straight quarter of triple-digit growth, but at a reduced pace of 112% to $28.7 billion, according to LSEG. From here, year-over-year comparisons get much tougher, and growth is expected to slow in each of the next six quarters.
Investors will be paying particularly close attention to Nvidia❼forecast for the October quarter. The company is expected to show growth of about 75% to $31.7 billion. Optimistic guidance will suggest that Nvidia❼deep-pocketed clients are signaling an ongoing willingness to open their wallets for the AI build-out, while a disappointing forecast could raise concern that infrastructure spending has gotten frothy.Jaipur Wealth Management
“Given the steep increase in hyperscale capex over the past 18 months and the strong near-term outlook, investors frequently question the sustainability of the current capex trajectory,” analysts at Goldman Sachs, who recommend buying the stock, wrote in a note last month.Udabur Stock
Much of the optimism heading into the report — the stock is up almost 10% in August — is due to comments from top customers about how much they❻ continuing to shell out for data centers and Nvidia-based infrastructure. The shares rose 1.5% on Tuesday to close at $128.30.
Last month, the CEOs of Google and Meta enthusiastically endorsed the pace of their build-outs and said underinvesting was a greater risk than overspending. Former Google CEO Eric Schmidt recently told students at Stanford, in a video that was later removed, that he was hearing from top tech companies “they need $20 billion, $50 billion, $100 billion” worth of processors.
But while Nvidia❼profit margin has been expanding of late, the company still faces questions about the long-term return on investment that clients will see from their purchases of devices that cost tens of thousands of dollars each and are being ordered in bulk.Hyderabad Wealth Management
During Nvidia❼last earnings call in May, CFO Colette Kress provided data points suggesting that cloud providers, which account for more than 40% of Nvidia❼revenue, would generate $5 in revenue for every $1 spent on Nvidia chips over four years.
Jaipur Investment
