NVIDIA Corporation (NVDA)

We saw NVDA jump yesterday after another quarter of blowout earnings. They surprised on both the top and bottom line. EPS growth rate of 111% versus this time last year! Sales growth of 106%. Question is whether that's going to be sustainable long-term?

Not that it won't continue to be innovative and profitable, but some of these tech giants in the AI space have analyst expectations set very high.

Terrific earnings report this week. It's his largest holding.

Is probably trading at 15x forward PE as shares keep getting cheaper and cheaper. He doesn't see the party ending soon. Happy to stick with it.

He will watch to see if the monetizing of this $1.5 trillion infrastructure will happen. It's still early innings.  Some say this is like Cisco in 2000, but NVDA is a high value-added product. NVDA will maintain and increase pricing power. NVDA is the centre of the AI trade.

Over 8 quarters, it's fallen 6 times on earnings. So, they need a blow-out quarter. Q3 guidance is critical. NVDA has telegraphed they will raise prices 15% to meet expectations.

There's little chance their earnings will disappoint. There's a 75% chance they will meet expectations and talk about a good Q3. They could talk about their next-generation chip, too. All this could lift the stock after being sideways. A dividend won't move the needle and it's premature. From October 2022 to October 2025, NVDA rose 1,700%, but much slower in the past year. But this could be a base to accelerate again; it's trading at its 100-day moving average. 

He'll watch what they say about memory costs and the impact on margins, and comments on their financing deal as well as comments on non-GPU products. These comments could shake things up positively.

Continues to improve, seeing higher highs and higher lows. Earnings will be a really good tell for the market. Semis have really come under pressure. Whatever NVDA does after tonight, the broader semis will follow suit. We know that it'll print great numbers, but where will the guidance fit in with expectations and is that already priced in?

Their earnings in recent years have been spectacular, but the stock price is waiting for earnings to catch up. 60-70x PE is unsustainable. The stock has been flat in recent months, but the PE has been declining. Its forward PE is in the low-20s. Is concerned that a lot of their business in concentrated in hyperscalers like Meta and Microsoft; if they reduce their capex spend, it will impact NVDA's profits. 

Expectations aren't sky-high. He's looking at this circular financing, and seeing if Nvidia is willing to share what this really means. While revenues are growing massively, it's not clear whether there's a huge profit yet in terms of this buildout.