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Because markets are forward-looking. They know this cycle of the AI hype bubble is coming to an end, so to put it simply, this earnings release is as good as it

Because markets are forward-looking. They know this cycle of the AI hype bubble is coming to an end, so to put it simply, this earnings release is as good as it will get for a while. The market believes there's nowhere to go but down from here.

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ckastner 2y ago
> put it simply, this earnings release is as good as it will get for a while They literally guided more growth for the next quarter and Nvidia is notorious for sandbagging this number.
- IAmGraydon 2y ago
  They can say whatever they want, but the market clearly isn’t buying it.
  - ckastner 2y ago
    No, that only thing clear is that the market expected better results. Not achieving those results does not imply that results are going downhill from now, as you suggest. Slowing growth and cooling margins are reasonable explanations for the stock being down even in light of continued growth. If the market believed that demand had indeed peaked this quarter as you suggest, the stock would absolutely crater. But nobody reasonable believes that. All the data from outside Nvidia (eg: Capex from hyperscalers) also points to continued growth.
talldayo 2y ago
The market thought Nvidia was toast when cryptocurrency flopped over. The demand for GPGPU compute is pervasive, and even if LLMs go nowhere then there's still applications for CUDA and high-performance server compute. When the dust settles, Nvidia's lifeline is less the AI demand and more their server niche they fill. Besides Apple, who can't be forced to build server hardware at gunpoint, Nvidia is the only TSMC customer bringing HPC to the consumer. That's an enormous segment they can capitalize on, and AI is really just the tip of the iceberg. With so many other OEMs laser-focused on AI performance, they're entirely glossing over the flexibility that made CUDA successful in the first place. Pour another one out for OpenCL, the industry hardly knew ye.
- Atotalnoob 2y ago
  How does nvidia compete with TSMC? I thought nvidia used TSMC for fab? And a Samsung, but that hardly makes them competitors. TSMC doesn’t sell chips directly, they just manufacture designs
  - talldayo 2y ago
    I should have said "customer" there, to be more clear. Nvidia competes with Apple for fab space on the latest nodes, which is more what I wanted to zoom in on. Apple has zero interest in courting Nvidia's customers, which leads me to believe that Nvidia has a practically captive market.
- IAmGraydon 2y ago
  No one here is saying NVidia is toast. Read my reply again.
seydor 2y ago
if they are so forward looking why did they pump the stock just a few months back
usaar333 2y ago
That's not the correct interpretation. Earnings will likely be higher next quarter. It's just that the rate of growth is slowing and when nvda is at a 45 P/E, you need high growth to justify its market cap.
- IAmGraydon 2y ago
  How is my interpretation not in line with what you just said?

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ckastner 2y ago

> put it simply, this earnings release is as good as it will get for a while They literally guided more growth for the next quarter and Nvidia is notorious for sandbagging this number.

IAmGraydon 2y ago
They can say whatever they want, but the market clearly isn’t buying it.
- ckastner 2y ago
  No, that only thing clear is that the market expected better results. Not achieving those results does not imply that results are going downhill from now, as you suggest. Slowing growth and cooling margins are reasonable explanations for the stock being down even in light of continued growth. If the market believed that demand had indeed peaked this quarter as you suggest, the stock would absolutely crater. But nobody reasonable believes that. All the data from outside Nvidia (eg: Capex from hyperscalers) also points to continued growth.

talldayo 2y ago

The market thought Nvidia was toast when cryptocurrency flopped over. The demand for GPGPU compute is pervasive, and even if LLMs go nowhere then there's still applications for CUDA and high-performance server compute. When the dust settles, Nvidia's lifeline is less the AI demand and more their server niche they fill. Besides Apple, who can't be forced to build server hardware at gunpoint, Nvidia is the only TSMC customer bringing HPC to the consumer. That's an enormous segment they can capitalize on, and AI is really just the tip of the iceberg. With so many other OEMs laser-focused on AI performance, they're entirely glossing over the flexibility that made CUDA successful in the first place. Pour another one out for OpenCL, the industry hardly knew ye.

Atotalnoob 2y ago
How does nvidia compete with TSMC? I thought nvidia used TSMC for fab? And a Samsung, but that hardly makes them competitors. TSMC doesn’t sell chips directly, they just manufacture designs
- talldayo 2y ago
  I should have said "customer" there, to be more clear. Nvidia competes with Apple for fab space on the latest nodes, which is more what I wanted to zoom in on. Apple has zero interest in courting Nvidia's customers, which leads me to believe that Nvidia has a practically captive market.
IAmGraydon 2y ago
No one here is saying NVidia is toast. Read my reply again.

seydor 2y ago

if they are so forward looking why did they pump the stock just a few months back

usaar333 2y ago

That's not the correct interpretation. Earnings will likely be higher next quarter. It's just that the rate of growth is slowing and when nvda is at a 45 P/E, you need high growth to justify its market cap.

IAmGraydon 2y ago
How is my interpretation not in line with what you just said?