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Nvidia Announces Financial Results for Fourth Quarter and Fiscal 2024

91 points by mfiguiere 3y ago

mfiguiere 3y ago
CFO: "In Q4 FY 24, large cloud providers represented more than half of our Data Center revenue..Strong demand was driven by enterprise software and consumer internet applications & multiple industry verticals" Not clear if Meta is included in the "cloud providers", if not that would push the share of revenue from Big Tech even further to 60-70% considering the 300k H100 order from Meta.
paulpauper 3y ago
Imagine shorting Nvidia in July 2023 last year at $500 because it seemed overvalued or overextended. now $700 like nothing. It goes to show how markets are more rational than assumed , in terms of correctly pricing in future earnings. It's not irrational exuberance, but rational. The huge rally this year was in anticipation of the blow-out earnings on Ai demand, which materialized . The 1997-2000 period in which stock prices wildly departed from fundamentals was more of an anomaly than the norm, yet people assume that it's the norm. The late 90s and tech boom and early 2000s crash was an outlier that made people overly pessimistic in subsequent decades.
- TheAlchemist 3y ago
  Am I understanding this correctly, that you judge market rationality on NVidia over the period of 1 year, absolute bubble rally ? Even with those materialized earnings, as you say, the market valuation is still at >30 times those earnings (and I'm being very generous by extrapolating this quarter earnings, not the past year). There is a reason for the saying "the market can stay irrationnal for longer than you can stay solvent". One should not short bubbles. But it's still a bubble ! EDIT: It's a bubble in NVidia valuation. Per se, it's a very good business, generating huge amounts of $.
- usaar333 3y ago
  Nvidia is a hard to value stock though. The revenue growth, while insanely high (120% annualized quarter over quarter), is decelerating. But the net income levels are insane (55% net income margin on revenue). This suggests huge space for competition to drive earnings growth down. But it's unclear when that will happen.
  - nicolashahn 3y ago
    Who would be the one to actually provide competition? AMD, Intel, someone else?
    - Octoth0rpe 3y ago
      I'd predict Amazon and MS. A huge portion of Nvidia's revenue is from data centers run by amazon/MS, and they both have at least some experience in designing their own chips (more on Amazon's end with Graviton). I'd expect that they are both motivated to try to design something in house that is more suited to their needs and cuts out the nvidia profit margin.
    - Detrytus 3y ago
      Yes, AMD (which has great GPUs, but sucks at software), Intel (that's improving rapidly on GPU side), and possibly Google with their Tensor. Also, AWS has their dedicated AI chips, aptly named Trainium and Inferentia. Theoretically even Apple could start producing AI chips based on their Neural Engine. The better NVIDIA's results are now the more that encourages the competitors to try and take some of the cake for themselves.
    - baq 3y ago
      Yes. And more you've heard about. And yet more you haven't, since they're in stealth.
    - hilux 3y ago
      My impression is that AMD has always had technically competitive products, but lagged in software and ecosystem and marketing. (It had a long line of dud CEOs.) Lisa Su (Jensen's cousin, btw) seems to have turned the ship around.
- baq 3y ago
  There's nothing rational about this valuation. Sir Isaac Newton would like to have a word. There was a certain radio company, a switch manufacturer, a video game retailer and a car company. Money inflows dominate the price and money outflows will dominate it in the future, but will it be tomorrow, in 6 months or 3 years is a different question.
  - pixl97 3y ago
    >There's nothing rational about this valuation. The market can remain irrational far longer than you can remain solvent.
    - baq 3y ago
      Oh absolutely. I can see nvidia trading at $1100 purely on the bubble gamma ramp momentum.
multimoon 3y ago
This is like playing a game of poker where you already think the guy has the best possible hand he could have and somehow when he lays his cards down, it’s even better.
- viscanti 3y ago
  Was this a "5 aces" level of poker hand? Or are we not quite there yet?
  - multimoon 3y ago
    Sure seems like it was to me. It’s crazy because while nVidia’s stock has been very inflated - they couldn’t have done a better job of backing up its price right now.
nadermx 3y ago
Is there a limit to the number of GPU's a company may need? I mean for example, assume no one can compete with Nvidia. At what point does it become more feasible to rewrite your architecture or use less GPU's, since it seems Nvidia can charge, and does charge, what ever they want for a GPU. And can charge more if they so wish, which they might. And how long would that take?
- belter 3y ago
  Minimum 3 to 4 years.
- hiddencost 3y ago
  There are only a few companies making competitors at scale. It's very interesting that Google doesn't sell TPUs. They don't because they need every TPU they can get fabricated.
- declaredapple 3y ago
  > At what point does it become more feasible to rewrite your architecture or use less GPU They are but it takes a lot of time. Most of the big players - Google, Meta, OpenAI, Amazon, and Microsoft all are actively developing TPU/NPUs that would be used instead of the H100/A100's everyone is using for machine learning. Google (tensorflow/jax), Meta(pytorch), Microsoft(onyx), Openai(triton) and Apple (mlx) each have software stacks for optimizing models for multiple platforms. It takes a lot of time to develop the silicon and software stack. As a result everyone is using H100's in the interum until the hardware/software catches up. Google has been using their TPUs already. There's other companies like Groq that are also developing NPU/TPU like devices.
  - altruios 3y ago
    Is there an Open (source) TPU project?
    - nl 3y ago
      There is SIMT on RISC V: https://www.semanticscholar.org/paper/Simty-%3A-generalized-SIMT-execution-on-RISC-V-Inria-Collange/6ca0d660157ba938ef6bb318b2207626bb32a5d6 https://www.semanticscholar.org/paper/Simty-%3A-generalized-... And some PoC work: https://vortex.cc.gatech.edu/publications/hotchips-poster.pdf https://vortex.cc.gatech.edu/publications/hotchips-poster.pd... Neither are specialized TPU/NPUs but they do fast vector operations.
mrtksn 3y ago
So, how many GPUs are needed to replace all the white collar workers? Maybe that’s the potential of NVIDIA. After software have eaten the world, now AI is eating everything.
- hiddencost 3y ago
  So far it's mostly licking everything
tmaly 3y ago
Unless Sam gets his 7T I can’t see the data center growth continuing on pace. I still would love to see a consumer card with 128GB of VRAM
- samspenc 3y ago
  I would also love to see a consumer GPU with a lot of VRAM. I think 128 GB would be too expensive BUT I'm hoping the Nvidia 50 series comes with 32+ GB VRAM for at least the top tier cards of the family (today they max out at 24 GB VRAM in the 3090 and 4090.)
  - outside415 3y ago
    imagine how impossibly sold out those cards would be.
    - ls612 3y ago
      4090s are only sold out because of the China sanctions and are moving back towards MSRP. Fundamentally even a 48GB desktop card would be no substitute for a B100.
      - outside415 3y ago
        yeah but if you had 4090s with H100 equiv VRAM (prob don't even need HBM equiv) that wouldn't require quantizing larger models you would end up with a ton of LLM workstations at a fraction of what they charge for H100s. The demand would be high. What China was doing with the 4090s requires a great deal of technical/manufacturing prowess that doesn't apply to most.
- whalesalad 3y ago
  I would love to see a rethinking of desktop hardware. GPU's are huge. They used to be dinky little add-on cards ... but at this point we almost need to have a dedicated mainboard for them. Imagine this - instead of a motherboard mounted to the back of the case, it is mounted in the center. Behind it would be another motherboard, with a socket for a GPU and ram slots for memory. Kinda like a right/left brain connected with a high-speed interconnect. You open the left side of the case to access CPU and its memory, you open the right side of the case to access the GPU and its memory. You would be able to upgrade your GPU chip independently of everything else. It wouldn't be mounted sideways in a PCI slot where additional brackets and support arms are needed. You could upgrade the RAM independently. Cooler, etc.
IG_Semmelweiss 3y ago
I remember a time when NVIDIA, ATI and 3dFX were neck and neck. What ever happened? It shows that the most important move is to simply stay in the game, not just maximize profits Edit: added ATI which I just remembered!
- FirmwareBurner 3y ago
  >What ever happened? 3dfx stagnated and fell behind due to bad management decisions. They seemed stuck on designing 3d accelerators like it was still 1996, which were just drawing triangles and doing texture mapping, while banking on higher clocks and adding multiple chips on board and even multiple cards in SLI to boost performance, while having the CPU take care of the rest in SW. But it was 1999 already and Nvidia moved to graphics processing units (GPUs) which could also offload the CPU and do transform, lighting, triangle setup/clipping, MPEG2 motion compensation and a multi-pipeline rendering engine for more polygon thruput at same clocks, along with being fully DX7 compliant, all in a single chip. The market decided that Nvidia's new direction is the future and not what 3dfx was doing. 3df tried to change course and catch up but it was too late, the GPU race was too cutthroat in those days. Nvidia was launching a new GPU generation every 6 months(!) instead of every 3 years like today, so a 6-12 month setback was a guaranteed death sentence no matter what you did. Also, one of 3dfx biggest blunders was trying to become a board maker themselves by spending a lot of cash buying a board manufacturer, which emptied their bank accounts and angered their other board partners who now saw them as unfair competitors so they moved to making ATI/Nvidia boards instead. >It shows that the most important move is to simply stay in the game, not just maximize profits How do you stay in the game if you go bankrupt because your products aren't competitive?
  - nequo 3y ago
    Just to add to what you're saying, the Acquired podcast has a couple long-form episodes on Nvidia and its competition: https://www.acquired.fm/episodes/nvidia-the-gpu-company-1993-2006 https://www.acquired.fm/episodes/nvidia-the-gpu-company-1993... https://www.acquired.fm/episodes/nvidia-the-machine-learning-company-2006-2022 https://www.acquired.fm/episodes/nvidia-the-machine-learning... CUDA itself is also a non-negligible factor in their success.
inadilemma 3y ago
Random, but a serious question. I've just received an offer from Nvidia as a Senior SWE, and another from [insert FAANG]. Should I be scared of the bubble-ness of Nvidia? I have a lot of faith in the company and its vision, but reading about the bubble always scares me.
- saintradon 3y ago
  Take it and RUN with it.
- karmasimida 3y ago
  It is already a highly speculated bubble, the share price is swinging drastically within the same day. That being said, Nvidia will have a good 2-3 years in the future, until the cloud providers start mass replace their chips with in-house ones. For money, unfortunately, it is as good as anyone's guess, but if you join now, double your share, it will be close to 4T. I personally didn't think that is sustainable amount of money if market/competition does their duty.
  - chatmasta 3y ago
    > Nvidia will have a good 2-3 years in the future, until the cloud providers start mass replace their chips with in-house ones How do you imagine that happening on such a rapid timeline? IMO, the biggest threat to Nvidia is radical innovation on the software side of AI that allows common use cases (training and inference) to run on clusters of commodity non-GPU hardware for cheaper price than GPU. A similar threat is posed from ASIC chips that are dedicated to LLM tasks, but at least in that case Nvidia can still compete for a specific hardware design rather than overcoming an entire category of commodity hardware.
    - karmasimida 3y ago
      Simply because of there is too much money on the table, news from today: https://qz.com/intel-microsoft-new-chip-semiconductor-nvidia-1851275354 https://qz.com/intel-microsoft-new-chip-semiconductor-nvidia... NVDA's margin is too high, it attracts competitors to eat into that.
NickC25 3y ago
How high can they go? The price is inflated for sure...but their margins are absolutely insane, and their quarterly growth % is just mind-blowing.
- nadermx 3y ago
  If you look at their earnings, they are growing at 3Bish a quarter. Assuming they maintain just that, feb 2025 they should be worth as much as apple is now, since they will be making that amount per quarter.
TradingPlaces 3y ago
It keeps happening.
HDThoreaun 3y ago
76% margins is absolutely bonkers. At what point does the government use that as evidence in an anti trust case?
almog 3y ago
Beat of course but on a percentage basis, this is the lowest EPS and revenue beat in the last 4 quarters.
- malloryerik 3y ago
  Any thoughts on why that might be?
  - gmays 3y ago
    Partly because analysts are learning their lesson in underestimating the AI demand and starting to correct for it. The other complication is that we don't have intuitions for AI, so it's easy to underestimate how astronomically large the market will be. And from an execution standpoint, Jensen (Nvidua CEO) has been preparing for a very long time (albeit unintentially, so nobody could predict AI to this extent). He also tends to go all-in on things, which has caused problems in the past (e.g. crypto crash), but just happened to be incredibly prescient in this moment.
smy20011 3y ago
Cisco in 2000: Gross margin in fiscal 2000 was 64.4%, compared with 65.0% in fiscal 1999. The following table shows the standard
dkrich 3y ago
Nvidia stock is extraordinarily stretched, even by it's own historical standards and it has been really stretched twice before (2017, 2021). It's a consensus Wall Street favorite. Retail traders who barely know what they do are now being lured in. I think the stock is close to a major top. Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. Judging by general consensus I follow here, on Twitter, and in the financial press, I'd say we are basically at euphoria. Euphoria can last for a bit but not for long. Not only do I not see a ton of upside in the share price here, I think it's a fantastic short opportunity, as when the tide goes out on a stock like this that is totally driven by the idea that it is supply-constrained, if that looks to be in doubt for any reason whatsoever, it is going to fall very far. I'm talking back to the double digits given the amount of supply they are currently producing. Keep in mind that there are only a handful of companies that can afford these chips at scale and the business model for what they are doing is far from proven. At some point, likely soon given where interest rates are, they are going to need to show a ROI or they are going to be forced to cut spending. It's a very unique positive feedback loop. Here you have the wealthiest most profitable companies in history that all have a vested interest in not being viewed as waving off the AI hype train. Therefore they basically have to show the street that they're investing which drives up demand for the chips and consequently the price. But you must understand that this process can play out in reverse at 10x the speed. All you need is consensus that spending on AI is suddenly not such a great investment. I suspect that what you might see happen is earnings for Microsoft, Alphabet, Meta, and Amazon start to suffer. This will require them to cut spending on data center development (unless they are able to show profit growth coming from that investment- unlikely on a short time scale). At that point Nvidia is going to have to cut costs and likely cut back on supply. This is the identical cycle that played out during the last hype cycle, which hilariously, centered on the Metaverse.
- naveen99 3y ago
  How much of it is zuck buying up all available nvidia product at any price ? AI is a more credible obsession than the metaverse. So he could just buy all nvidia output for the next few years…

91 points by mfiguiere 3y ago

CFO: "In Q4 FY 24, large cloud providers represented more than half of our Data Center revenue..Strong demand was driven by enterprise software and consumer internet applications & multiple industry verticals" Not clear if Meta is included in the "cloud providers", if not that would push the share of revenue from Big Tech even further to 60-70% considering the 300k H100 order from Meta.

paulpauper 3y ago

Imagine shorting Nvidia in July 2023 last year at $500 because it seemed overvalued or overextended. now $700 like nothing. It goes to show how markets are more rational than assumed , in terms of correctly pricing in future earnings. It's not irrational exuberance, but rational. The huge rally this year was in anticipation of the blow-out earnings on Ai demand, which materialized . The 1997-2000 period in which stock prices wildly departed from fundamentals was more of an anomaly than the norm, yet people assume that it's the norm. The late 90s and tech boom and early 2000s crash was an outlier that made people overly pessimistic in subsequent decades.

TheAlchemist 3y ago
Am I understanding this correctly, that you judge market rationality on NVidia over the period of 1 year, absolute bubble rally ? Even with those materialized earnings, as you say, the market valuation is still at >30 times those earnings (and I'm being very generous by extrapolating this quarter earnings, not the past year). There is a reason for the saying "the market can stay irrationnal for longer than you can stay solvent". One should not short bubbles. But it's still a bubble ! EDIT: It's a bubble in NVidia valuation. Per se, it's a very good business, generating huge amounts of $.
usaar333 3y ago
Nvidia is a hard to value stock though. The revenue growth, while insanely high (120% annualized quarter over quarter), is decelerating. But the net income levels are insane (55% net income margin on revenue). This suggests huge space for competition to drive earnings growth down. But it's unclear when that will happen.
- nicolashahn 3y ago
  Who would be the one to actually provide competition? AMD, Intel, someone else?
  - Octoth0rpe 3y ago
    I'd predict Amazon and MS. A huge portion of Nvidia's revenue is from data centers run by amazon/MS, and they both have at least some experience in designing their own chips (more on Amazon's end with Graviton). I'd expect that they are both motivated to try to design something in house that is more suited to their needs and cuts out the nvidia profit margin.
  - Detrytus 3y ago
    Yes, AMD (which has great GPUs, but sucks at software), Intel (that's improving rapidly on GPU side), and possibly Google with their Tensor. Also, AWS has their dedicated AI chips, aptly named Trainium and Inferentia. Theoretically even Apple could start producing AI chips based on their Neural Engine. The better NVIDIA's results are now the more that encourages the competitors to try and take some of the cake for themselves.
  - baq 3y ago
    Yes. And more you've heard about. And yet more you haven't, since they're in stealth.
  - hilux 3y ago
    My impression is that AMD has always had technically competitive products, but lagged in software and ecosystem and marketing. (It had a long line of dud CEOs.) Lisa Su (Jensen's cousin, btw) seems to have turned the ship around.
baq 3y ago
There's nothing rational about this valuation. Sir Isaac Newton would like to have a word. There was a certain radio company, a switch manufacturer, a video game retailer and a car company. Money inflows dominate the price and money outflows will dominate it in the future, but will it be tomorrow, in 6 months or 3 years is a different question.
- pixl97 3y ago
  >There's nothing rational about this valuation. The market can remain irrational far longer than you can remain solvent.
  - baq 3y ago
    Oh absolutely. I can see nvidia trading at $1100 purely on the bubble gamma ramp momentum.

multimoon 3y ago

This is like playing a game of poker where you already think the guy has the best possible hand he could have and somehow when he lays his cards down, it’s even better.

viscanti 3y ago
Was this a "5 aces" level of poker hand? Or are we not quite there yet?
- multimoon 3y ago
  Sure seems like it was to me. It’s crazy because while nVidia’s stock has been very inflated - they couldn’t have done a better job of backing up its price right now.

nadermx 3y ago

Is there a limit to the number of GPU's a company may need? I mean for example, assume no one can compete with Nvidia. At what point does it become more feasible to rewrite your architecture or use less GPU's, since it seems Nvidia can charge, and does charge, what ever they want for a GPU. And can charge more if they so wish, which they might. And how long would that take?

belter 3y ago
Minimum 3 to 4 years.
hiddencost 3y ago
There are only a few companies making competitors at scale. It's very interesting that Google doesn't sell TPUs. They don't because they need every TPU they can get fabricated.
declaredapple 3y ago
> At what point does it become more feasible to rewrite your architecture or use less GPU They are but it takes a lot of time. Most of the big players - Google, Meta, OpenAI, Amazon, and Microsoft all are actively developing TPU/NPUs that would be used instead of the H100/A100's everyone is using for machine learning. Google (tensorflow/jax), Meta(pytorch), Microsoft(onyx), Openai(triton) and Apple (mlx) each have software stacks for optimizing models for multiple platforms. It takes a lot of time to develop the silicon and software stack. As a result everyone is using H100's in the interum until the hardware/software catches up. Google has been using their TPUs already. There's other companies like Groq that are also developing NPU/TPU like devices.
- altruios 3y ago
  Is there an Open (source) TPU project?
  - nl 3y ago
    There is SIMT on RISC V: https://www.semanticscholar.org/paper/Simty-%3A-generalized-SIMT-execution-on-RISC-V-Inria-Collange/6ca0d660157ba938ef6bb318b2207626bb32a5d6 https://www.semanticscholar.org/paper/Simty-%3A-generalized-... And some PoC work: https://vortex.cc.gatech.edu/publications/hotchips-poster.pdf https://vortex.cc.gatech.edu/publications/hotchips-poster.pd... Neither are specialized TPU/NPUs but they do fast vector operations.

mrtksn 3y ago

So, how many GPUs are needed to replace all the white collar workers? Maybe that’s the potential of NVIDIA. After software have eaten the world, now AI is eating everything.

hiddencost 3y ago
So far it's mostly licking everything

tmaly 3y ago

Unless Sam gets his 7T I can’t see the data center growth continuing on pace. I still would love to see a consumer card with 128GB of VRAM

samspenc 3y ago
I would also love to see a consumer GPU with a lot of VRAM. I think 128 GB would be too expensive BUT I'm hoping the Nvidia 50 series comes with 32+ GB VRAM for at least the top tier cards of the family (today they max out at 24 GB VRAM in the 3090 and 4090.)
- outside415 3y ago
  imagine how impossibly sold out those cards would be.
  - ls612 3y ago
    4090s are only sold out because of the China sanctions and are moving back towards MSRP. Fundamentally even a 48GB desktop card would be no substitute for a B100.
    - outside415 3y ago
      yeah but if you had 4090s with H100 equiv VRAM (prob don't even need HBM equiv) that wouldn't require quantizing larger models you would end up with a ton of LLM workstations at a fraction of what they charge for H100s. The demand would be high. What China was doing with the 4090s requires a great deal of technical/manufacturing prowess that doesn't apply to most.
whalesalad 3y ago
I would love to see a rethinking of desktop hardware. GPU's are huge. They used to be dinky little add-on cards ... but at this point we almost need to have a dedicated mainboard for them. Imagine this - instead of a motherboard mounted to the back of the case, it is mounted in the center. Behind it would be another motherboard, with a socket for a GPU and ram slots for memory. Kinda like a right/left brain connected with a high-speed interconnect. You open the left side of the case to access CPU and its memory, you open the right side of the case to access the GPU and its memory. You would be able to upgrade your GPU chip independently of everything else. It wouldn't be mounted sideways in a PCI slot where additional brackets and support arms are needed. You could upgrade the RAM independently. Cooler, etc.

IG_Semmelweiss 3y ago

I remember a time when NVIDIA, ATI and 3dFX were neck and neck. What ever happened? It shows that the most important move is to simply stay in the game, not just maximize profits Edit: added ATI which I just remembered!

FirmwareBurner 3y ago
>What ever happened? 3dfx stagnated and fell behind due to bad management decisions. They seemed stuck on designing 3d accelerators like it was still 1996, which were just drawing triangles and doing texture mapping, while banking on higher clocks and adding multiple chips on board and even multiple cards in SLI to boost performance, while having the CPU take care of the rest in SW. But it was 1999 already and Nvidia moved to graphics processing units (GPUs) which could also offload the CPU and do transform, lighting, triangle setup/clipping, MPEG2 motion compensation and a multi-pipeline rendering engine for more polygon thruput at same clocks, along with being fully DX7 compliant, all in a single chip. The market decided that Nvidia's new direction is the future and not what 3dfx was doing. 3df tried to change course and catch up but it was too late, the GPU race was too cutthroat in those days. Nvidia was launching a new GPU generation every 6 months(!) instead of every 3 years like today, so a 6-12 month setback was a guaranteed death sentence no matter what you did. Also, one of 3dfx biggest blunders was trying to become a board maker themselves by spending a lot of cash buying a board manufacturer, which emptied their bank accounts and angered their other board partners who now saw them as unfair competitors so they moved to making ATI/Nvidia boards instead. >It shows that the most important move is to simply stay in the game, not just maximize profits How do you stay in the game if you go bankrupt because your products aren't competitive?
- nequo 3y ago
  Just to add to what you're saying, the Acquired podcast has a couple long-form episodes on Nvidia and its competition: https://www.acquired.fm/episodes/nvidia-the-gpu-company-1993-2006 https://www.acquired.fm/episodes/nvidia-the-gpu-company-1993... https://www.acquired.fm/episodes/nvidia-the-machine-learning-company-2006-2022 https://www.acquired.fm/episodes/nvidia-the-machine-learning... CUDA itself is also a non-negligible factor in their success.

inadilemma 3y ago

Random, but a serious question. I've just received an offer from Nvidia as a Senior SWE, and another from [insert FAANG]. Should I be scared of the bubble-ness of Nvidia? I have a lot of faith in the company and its vision, but reading about the bubble always scares me.

saintradon 3y ago
Take it and RUN with it.
karmasimida 3y ago
It is already a highly speculated bubble, the share price is swinging drastically within the same day. That being said, Nvidia will have a good 2-3 years in the future, until the cloud providers start mass replace their chips with in-house ones. For money, unfortunately, it is as good as anyone's guess, but if you join now, double your share, it will be close to 4T. I personally didn't think that is sustainable amount of money if market/competition does their duty.
- chatmasta 3y ago
  > Nvidia will have a good 2-3 years in the future, until the cloud providers start mass replace their chips with in-house ones How do you imagine that happening on such a rapid timeline? IMO, the biggest threat to Nvidia is radical innovation on the software side of AI that allows common use cases (training and inference) to run on clusters of commodity non-GPU hardware for cheaper price than GPU. A similar threat is posed from ASIC chips that are dedicated to LLM tasks, but at least in that case Nvidia can still compete for a specific hardware design rather than overcoming an entire category of commodity hardware.
  - karmasimida 3y ago
    Simply because of there is too much money on the table, news from today: https://qz.com/intel-microsoft-new-chip-semiconductor-nvidia-1851275354 https://qz.com/intel-microsoft-new-chip-semiconductor-nvidia... NVDA's margin is too high, it attracts competitors to eat into that.

NickC25 3y ago

How high can they go? The price is inflated for sure...but their margins are absolutely insane, and their quarterly growth % is just mind-blowing.

nadermx 3y ago
If you look at their earnings, they are growing at 3Bish a quarter. Assuming they maintain just that, feb 2025 they should be worth as much as apple is now, since they will be making that amount per quarter.

TradingPlaces 3y ago

It keeps happening.

HDThoreaun 3y ago

76% margins is absolutely bonkers. At what point does the government use that as evidence in an anti trust case?

almog 3y ago

Beat of course but on a percentage basis, this is the lowest EPS and revenue beat in the last 4 quarters.

malloryerik 3y ago
Any thoughts on why that might be?
- gmays 3y ago
  Partly because analysts are learning their lesson in underestimating the AI demand and starting to correct for it. The other complication is that we don't have intuitions for AI, so it's easy to underestimate how astronomically large the market will be. And from an execution standpoint, Jensen (Nvidua CEO) has been preparing for a very long time (albeit unintentially, so nobody could predict AI to this extent). He also tends to go all-in on things, which has caused problems in the past (e.g. crypto crash), but just happened to be incredibly prescient in this moment.

smy20011 3y ago

Cisco in 2000: Gross margin in fiscal 2000 was 64.4%, compared with 65.0% in fiscal 1999. The following table shows the standard

dkrich 3y ago

Nvidia stock is extraordinarily stretched, even by it's own historical standards and it has been really stretched twice before (2017, 2021). It's a consensus Wall Street favorite. Retail traders who barely know what they do are now being lured in. I think the stock is close to a major top. Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. Judging by general consensus I follow here, on Twitter, and in the financial press, I'd say we are basically at euphoria. Euphoria can last for a bit but not for long. Not only do I not see a ton of upside in the share price here, I think it's a fantastic short opportunity, as when the tide goes out on a stock like this that is totally driven by the idea that it is supply-constrained, if that looks to be in doubt for any reason whatsoever, it is going to fall very far. I'm talking back to the double digits given the amount of supply they are currently producing. Keep in mind that there are only a handful of companies that can afford these chips at scale and the business model for what they are doing is far from proven. At some point, likely soon given where interest rates are, they are going to need to show a ROI or they are going to be forced to cut spending. It's a very unique positive feedback loop. Here you have the wealthiest most profitable companies in history that all have a vested interest in not being viewed as waving off the AI hype train. Therefore they basically have to show the street that they're investing which drives up demand for the chips and consequently the price. But you must understand that this process can play out in reverse at 10x the speed. All you need is consensus that spending on AI is suddenly not such a great investment. I suspect that what you might see happen is earnings for Microsoft, Alphabet, Meta, and Amazon start to suffer. This will require them to cut spending on data center development (unless they are able to show profit growth coming from that investment- unlikely on a short time scale). At that point Nvidia is going to have to cut costs and likely cut back on supply. This is the identical cycle that played out during the last hype cycle, which hilariously, centered on the Metaverse.

naveen99 3y ago
How much of it is zuck buying up all available nvidia product at any price ? AI is a more credible obsession than the metaverse. So he could just buy all nvidia output for the next few years…