NVDA

This autumn earnings season on Wall Street was dominated by varying bets on NVidia release. As a bright example, Barclays analysts shared their views that the heightened anticipation surrounding NVidia's results was a reflection of the outsized impact of the AI agenda to become the "defining market catalyst of the year", eclipsing regular macroeconomic news including US inflation dynamics and Federal Reserve decisions. And now, when the hyping chipmaker, which is also the world's largest issuer in terms of market caps, eventually posted its blowout numbers and forward guidance, on record highs as usually, I am personally pleased, being calm about the overall bullish trend in most techs and generally in the S&P 500. Investors may set higher goals after NVIDIA simply took a firmer foothold in the direct vicinity of its all-time peaking price in what I might call the natural and normal way of self-effacingly thanking the market crowd for its kind attention. With no sharp fluctuations to follow the report, NVidia price has hovered between 0.3% and 2.0% in after-hours activity, literally a small step below its closing level at $145.89 on the previous regular session on November 20. Just stepping up to the occasion was enough to grow above $148, which corresponds to +1.5%, at the very first moment of today's pre-market activity. A fresh all-time peak at $152.88 has been shown immediately when the regular session began, which is setting the next standard bar, even though the price retracement back to $145 area or below would still be O.K. without spoiling the overall mood. Another real feat for the AI glory is taken casually by most in the market.

NVidia did not provide another jump in terms of market prices, yet it technically build another to-the-moon-bridge. The company's CEOs officially announced Q3 EPS (earnings per share) of as much as $0.81 (more than doubling its profit achievements at $0.402 in the same quarter of 2023) on revenue of $35.1 billion (against $18.12 billion only one year ago and $30 billion in the previous quarter of 2024). We know that human greed knows no bounds, and so nobody could be fully satisfied with a new historical record by NVidia, which is a clear reason for the market's muted response, but the pool of high-rated analysts at leading media agencies including Reuters and Bloomberg anticipated EPS of $0.75 on revenue of $33.09 billion. The actual results from NVidia were 8% better in profit and 6% higher in terms of revenue. Meanwhile, NVidia updated its own forecast for revenue of $37.5 billion, plus or minus 2%, for the current quarter, which means additional 5% to 9% of growth in nearest three months, compared with previous consensus estimate of $37.09 billion (+5,66%) on average, according to data compiled by LSEG.

NVidia actually readmitted that only supply snags is the factor to temporarily limit growing deliveries amid the boom of demand. And so, I could raise my personal target for NVIDIA well above $220. Maybe not everybody on Wall Street was impressed, but I am surely not the only market dreamer who admired the recent NVidia business performance and its further plans. Analysts from Rosenblatt Securities are even greater optimists as the reputable financial group even raised its price target for NVidia share to $220, maintaining a Buy rating, of course. They especially noted "a positive outlook for the January quarter", primarily because of "higher-than-anticipated demand for its Hopper products", while Blackwell wafers line is "also anticipated to experience a significant supply ramp-up, as it is expected to be sold out for the next several quarters".

The new line of processors "has been embraced by NVidia's customers", with the company going to exceed its initial projections "of several billion dollars in sales" of the new generation of processors in Q4, NVidia's Colette Kress confirmed during a conference call. When asked about media reports that NVidia's latest Grace Blackwell liquid-cooled server containing 72 of the new chips allegedly met overheating issues during initial testing, CEO Jensen Huang commented there were no issues like that and NVidia large customers including Microsoft and Oracle are already updating the systems. The bottleneck for more chip supply is just the limited capacity for advanced manufacturing techniques at the company's fabrication partners like TSMC. As Jensen Huang said, when ramping Blackwell chips up, more production lines would be available to improve the yield, which is usually considered as the number of working chips per wafer, as well as the cycle time. I was fully satisfied with these comments, and what about you?