Important events
May 252023
NVDA: Nvidia Rides the AI Boom as Bold Outlook Boost Shares by 25% to an All-Time Record
The US chipmaker’s stock sits at an all-time high after adding roughly $200bn to its valuation overnight on a revenue forecast far ahead of consensus.- Nvidia, the world’s largest chipmaker by value, soared as much as 25% in after-hours trading on Wednesday. The company reported first-quarter earnings for the fiscal 2024 and added a hugely impressive revenue projection, far outpacing Wall Street expectations. Why? AI, AI, and more AI.
- Surging demand for AI-enabling chips has prompted Nvidia to raise its sales target for the current quarter to $11bn, or roughly 50% higher than the $7.2bn expected, and above this quarter’s $7.2bn revenue. As Nvidia is looking to position itself as a leader in chips for AI apps, its stock (ticker: NVDA) is now sitting on a record high of $960bn.
- If there’s a company that gets to ride out the short-term trends in tech, it’s Nvidia. Those that were around during the crypto boom know how difficult it was to revamp your gaming PC with a powerful graphics card – they were all scooped up by ambitious miners. The AI buzz has brought the company in the spotlight again.
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Mar 062023
Nvidia Investors Fear New Huawei Restrictions Could Endanger Sales
- Nvidia’s sales could suffer from proposed restrictions on US companies trading with Huawei.
- The restrictions could also impact other companies trading with Huawei like Qualcomm.
- The proposed restrictions are still in preliminary drafting and could be revised.
Nvidia has been having a stellar start to the year so far with its share price rising by over 60% since January 1st. Even over the past month alone, NVDA has seen a 21% increase. The chip maker has also been gaining serious ground against Intel – who’s market dominance has been slipping significantly in recent years. As such, it’s difficult to imagine how Nvidia’s rally could come to an end. But some investors are now worried that its proposed sales plan is about to be thwarted.
What are investors worried about?
Nvidia is planning on selling its tech to Chinese telecom giant Huawei, but the US government could be about to expand its current restrictions on the ability of US companies to trade with the company, due to concerns surrounding its collecting of US data. Analysts have suggested that if it is passed in its current form, it could represent a significant dent in revenue streams for not only Nvidia, but also other companies who trade with Huawei such as Qualcomm.
Is it set in stone?
It’s still possible that the bill will need to be revised, as it is still in a preliminary draft. Huawei has become one of the most restricted companies by the US government amid spying concerns. On top of that, Nvidia is in a strong position to be facing economic challenges. With an almost 70% gain over the past 6 months, it likely has room for its sales to be impacted to an extent. And for the time being, investors seem to be remaining level-headed while the restrictions are drafted.
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Feb 232023
Nvidia stock pumps after earnings beat
- Nvidia stock rallied nearly 9% in after-hours trading on Wednesday, bolstered by the company’s better-than-expected revenue and net income. The US chipmaker generated revenue of $6.05B, vs expectations of $6.00B. Adjusted EPS landed at 88 cents a share, vs 81 cents expected.
- This quarter promises to be even better - Nvidia is betting that the rise of AI tech will drive more sales for its own graphics processors which are capable of running machine learning software. In numbers, Q1 revenue is expected to hit $6.5B, topping the Street estimate of $6.02B.
- Nvidia has been at the forefront of tech’s roaring comeback. Its stock has seen a massive inflow of capital, leading to a 45% rise since the turn of the year. Share price is still some ways away from its all-time high of $330 apiece. Let’s see if the AI buzz will help top that this year.
Illustration by TradingView
Nov 172022
Sign of the semiconductor times
Dwindling demand could mean there’s a difficult road ahead for the semiconductor industry.- Nvidia has announced their Q3 earnings which didn’t paint the company in a great light. The semiconductor manufacturer posted an EPS of $0.58 which missed expectations of $0.69, and blamed a bloated inventory and China’s zero-covid policy for harming demand.
- The announcement had its share price sliding into the red – down by 4.5% today. The company’s been struggling to sell its graphics cards as demand for PCs continues to slow in the wake of the pandemic. Sales in its data center business were up 31% YoY, but is that enough to fuel revenue growth?
- Rival chipmaker Micron had a pretty bleak warning for the industry too, announcing they’re taking steps to limit the size of their inventory and cutting production of two kinds of memory chip by 20%. Demand will need to pick up for the sector to return to its pandemic success.
Anne Nygård / Unsplash
Oct 112022
A sweeping setback
Biden adds to the woes of semiconductor brands with a sweeping set of export controls that look to increase competition with China.- The fight for control of the semiconductor industry is intensifying as the Biden administration’s new curbs look to cut China off from some semiconductor chips made with US equipment with the aim of changing the way chip companies can do business with the region’s tech industry.
- There are bound to be a few casualties given these are some of the strongest actions taken so far to contain China’s dominance over the semiconductor market. Depending how widely the restrictions are enforced, the fallout could extend beyond semiconductors and impact any industry with a reliance on high-end computing like EVs and smartphones
- Nvidia shares dropped 3.3% on Monday to their lowest level since August 2020, and the iShares Semiconductor ETF sank 3.4% to its lowest level since November 2020 as the potential effects of these curbs dawned on chip investors, compounded by more subtle restrictions from earlier this year and existing supply chain snarls.
Anne Nygård / Unsplash
Sep 022022
A chip in the balance sheet
Regulatory restrictions are putting a crimp in Nvidia’s style while one of its old acquaintances causes trouble in chip-land.- Nvidia is expecting a sales hit to the tune of $400m after the chipmaker was told by the US government to stop selling its tech in Russia and China so as to prevent them from building out their military power – they’ve filed for a license to continue with some Chinese exports but don’t know if they’ll be granted an exemption and the hit to the balance sheet is gonna be big.
- Shares fell just under 8% on Thursday on the back of the warning after closing August down 16.9% to take its YTD losses to an eye-watering 54% – a stark turnaround from a two-year bull run that saw prices add nearly 400% in 2020 and 2021. Chip rival AMD said the new laws may hurt their finances as well as it watched its stock drop 3%.
- It’s all drama in the chip world this week as Arm decides to sue Qualcomm. Arm, who had a drawn out will-they-won’t-they relationship with Nvidia, is coming for Qualcomm and its newly acquired Nuvia for a breach of licensing agreements – the pair have a long history of working together but have been at odds the last few years, and this could really hurt Qualcomm’s strategic plans for expansion.
Maxim Hopman / Unsplash
Aug 252022
Gaming gets investors down
Nvidia perhaps needs to remind itself of the phrase “underpromise and overdeliver” as the chip maker misses even its own lowered forecast.- Nvidia shares edged down around 3% in extended trading on Wednesday after reporting second quarter earnings that missed fairly dramatically on both ends with EPS of $0.51 vs the $1.26 expected, on revenues of $6.7bn that were in line with its own lowered forecast but below the $8.1bn analysts were estimating – so not an insignificant miss.
- Disappointing gaming sales driven by macroeconomic conditions were the core issue here, according to Nvidia anyway. Gaming department revenue was down 33% YoY to $2.04bn, a sharper decline than anticipated, and Nvidia said consumer demand has been quickly tapering – on the plus side, its data center business rose 61% YoY so it's not all bad.
- Near-term failures are overshadowing its long-term potential. Nvidia’s shares have lost 43% this year against a struggling economy, but many analysts still believe the best is yet to come. The GPU market is forecast to be worth around $201bn by 2027, and given Nvidia controls 21% of the current market, you can see the potential for success.
Nana Dua / Unsplash
Aug 092022
Nvidia sounds the earnings alarm
You know when you’ve got bad news for someone and you can’t think of anything else until you get it off your chest? Yeah well, so does Nvidia.- Nvidia shares dipped 6.3% on Monday for its worst day since mid-June after the chip-maker posted preliminary Q2 earnings that show early revenues missed expectations at $6.7bn and came in way below its initial outlook of $8.1bn thanks to less demand for electronic components – Nvidia seems confident its long-term gross margin goals are intact, but let’s wait and see.
- The miss was largely attributed to a major slowdown in its gaming segment, which saw revenues fall 33% YoY to $2.04bn and echoing the sentiment of other gaming hardware companies. It reflects an overall change in market mood and a general decline in consumer spending – worth noting AMD as a standout in the space, which increased its gaming revenue 32% YoY.
- The ‘crypto hangover’ ain’t going anywhere fast, much like all my real hangovers since I turned 27. Channel partners – who sell Nvidia GPUs – saw lower sales on the back of a decline in the value of mining-based cryptos, which meant fewer miners looking to buy cards and more cards on the second hand market. Will crypto’s current recovery help?
Javier Martínez / Unsplash
May 262022
Inflation killed the Nvidia star
When the chips are down, it looks like positive earnings reports mean nada.- NVDA slid more than 6% in extended trading despite topping its Q1 earnings report with EPS of $1.36 on revenues that were up an impressive 46% to reach a record-breaking $8.29bn. Chip sales to computing cloud companies managed to outperform Nvidia’s gaming business, up 83% YoY to $3.75bn.
- What did Nvidia do next? Well, if its earnings report was one of its shiny microchips, it basically brandished that to investors, only to then shove it into a toaster like a pop tart. The company lowered its revenue estimates for Q2, now around $400m short of Wall St. expectations, while also admitting it is slowing down its hiring to curb costs.
- Nvidia’s outlook is one of a “challenging macroeconomic environment”, thanks to high inflation. With NVDA already down 43% since the start of the year, investors will be hoping to see the stock bottom out soon.
Matt Botsford / Unsplash
May 092022
The SEC eyes crypto gains
Turns out Nvidia has been keeping its crypto gainz far too low-key for the SEC, which hands the chipmaker a hefty fine.- Nvidia will have to pay $5.5m as part of a settlement with the Securities and Exchange Commission, which says that the company failed to appropriately inform their investors about how crypto miners were fuelling heightened demand for its graphics cards. The stock lost around 1% on Friday, but is sitting at its lowest point since July.
- The drama goes all the way back to 2017, when Nvidia supposedly failed to say that crypto mining was responsible for a 52% uptick in its gaming segment – the SEC says investors should have known their profits were dependent on such a volatile market.
- Nvidia has sidestepped the concerns by creating its very own crypto mining chip, and added software that made its graphics cards impossible to use for mining – however, said chips aren’t actually doing very well, seeing sales revenue decline to $24m in its latest quarter from $266m in Q2 last year.
Alireza Khatami / Unsplash
Mar 252022
Nvidia says the magic $1tn words
Chip makers managed to bring out the bulls despite fighting in Eastern Europe threatening supplies.🔍 Key points:
- Nvidia got analysts excited with its investor-day presentation, where the chipmaker said that its exploration of the datacenter, automotive, and gaming markets offer a $1tn opportunity – and what investor doesn’t like the word “trillion”?
- Intel added to the optimistic view of semiconductor stocks. Its CEO appeared on Capitol Hill on Wednesday to argue that government subsidies for domestic manufacturing would boost national security and address the global chip shortage.
- Nvidia led the gains with a nearly 10% jump on Thursday, and Intel saw its biggest one day gain in over a year with a 7% increase. At the same time though, the invasion of Ukraine could derail production of neon (a key gas ingredient for semiconductors), threatening supply chains even further.
FLY:D / Unsplash
Mar 172022
Analysts are chipper about the future
Nvidia gets a boost from Wells Fargo, who thinks the stock has a future despite its Arm disappointment – but can the UK chip designer say the same?🔍 Key points:
- Nvidia shares popped nearly 7% on Wednesday to hit a one-month high after Wells Fargo analyst Christopher Harvey added the stock to its “Signature Picks” list.
- Harvey thinks the chipmaker provides a great risk/reward opportunity and he expects a bunch of exciting developments from Nvidia’s upcoming investor day that would bring in some very big profits – he gave the company a $370 price target, a premium of over 50% on Wednesday’s close of $244.
- But British chip designer Arm isn’t feeling so hot after Nvidia’s $50bn takeover failed to get regulatory approval, and is having to cut up to 1,000 jobs as it prepares to possibly be taken public by Softbank.
Griffin Wooldridge / Unsplash
Mar 072022
Another day, another hack
The online world is becoming a battleground of its own, with Nvidia and Samsung becoming the latest corporations to be hacked.🔍 Key points:
- Hacker group Lapsus$ got access to hundreds of gigabytes of proprietary Nvidia data last week after sending out a phishing email, handing the chip maker some v niche demands – they wanted Nvidia to open source its GPU drivers forever and remove its Ethereum cryptocurrency mining nerf from its GPUs.
- But Nvidia made no moves to meet the threats. Now, the hackers have leaked the credentials of what they claim to be more than 71k Nvidia employees online and say that it's in discussions with someone who wants to buy the company’s source code for $1m.
- And Samsung has now been hit too, with what is suspected to be the same group of hackers releasing almost 190GB of confidential data and code from various Samsung projects.
Illustration by TradingView
Feb 172022
Tough crowd
Nvidia smashes its first earnings since abandoning its Arm deal, but gets a meek reception from a market that has mile high expectations for the chip giant.Key points:
- Nvidia easily topped on both ends in its Q4 report with EPS that had jumped 69% y-o-y to $1.32, on top of revenue that was up 53% y-o-y to hit $7.64bn. It also delivered a guidance beat as the cherry on top, forecasting $8.1bn in the current quarter despite ongoing supply shortages.
- Its data center sales are popping off atm, seeing growth of 71% in the quarter to hit $3.26bn in sales. It comes as more cloud providers and tech companies like Meta (FB) turn to its GPUs to power their foray into artificial intelligence and the Metaverse – a trend that’s unlikely to slow down anytime soon.
- Despite all that, prices dropped 8% in Thursday morning trading. Given the stock is trading at 49x its projected profit, expectations for the chip giant are through the roof and a solid earnings may not be enough to wow. CEO Jensen Huang said himself: “We all have to recognize that the market size, our market footprint, is much larger than it used to be.”
Illustration by TradingView
Feb 082022
The Arms race comes to an end
After finding the regulatory gun power too much to conquer, Nvidia officially officially abandons its acquisition of chip firm Arm.Key points:
- Nvidia has officially given up its $66bn Arm takeover, which would have marked the biggest semiconductor deal in history – it’ll also have to pay Softbank $1.25bn for not going through with the transaction.
- The deal faced nonstop backlash from regulators in the U.K., U.S., E.U., and China; so instead of selling to Nvidia, Softbank is planning on taking Arm public in 2023.
- On the plus side, Nvidia is enjoying some bullish momentum after a bunch of chipmakers released positive earnings last week and led to a few analyst upgrades – Nvidia’s share price has been edging up and it’s now worth even more than Meta with a $618bn market cap.
Austin Loveing / Unsplash
Jan 262022
Is Nvidia planning on throwing in the towel?
A source told Bloomberg that Nvidia is sick of all the regulatory battles and is thinking about lifting its Arm to wave the white flag – but it seems investors are still willing to fight.- The stock is trading at a three-month low after sinking 4.5% on Tuesday and seeing last week’s tech rout wipe 13% off prices for its worst week since March 2020.
- It’s apparently getting ready to dump its attempted $40bn Arm acquisition, according to Bloomberg's secret sources, who say Nvidia told its partners to not expect the deal to close.
- It's contending with severe anti-competition concerns from regulators in the U.S., U.K., Europe, and China; as well as from its competitors and popular figures like Elon Musk.
Bernard Hermant / Unsplash
Jan 122022
Nvidia wants to kill the spark
Nvidia is tired of Arm wrestling with regulators, arguing that U.K. has got its love goggles on.- Nvidia takes on the U.K.’s CMA, who are considering blocking its $40bn Arm takeover, arguing that their concerns are “romanticizing” Arm’s history and current market power.
- The deal is set to miss its original deadline of March 2022 thanks to unconquered antitrust concerns from the U.S., Europe, and China.
- BofA still thinks Nvidia is a “top pick” in the semiconductor field for 2022, predicting growth of up to 30% this year and gains of nearly $100 for its stock price.
Jakub Skafiriak / Unsplash
Dec 032021
Nvidia is losing its grip
“The largest semiconductor chip merger in history” is one step closer to crumbling after U.S. regulators pile on.- The FTC has sued to block Nvidia’s $40bn takeover of British chip designer Arm, saying the merger will “stifle competing next-generation technologies.”
- Regulatory clouds have been gathering since the deal was announced in September 2020. The E.U. are taking their time with approval, China remains a hurdle, and the U.K. is also investigating.
- Analysts and investors have pretty much written off the deal, saying it's now looking “highly unlikely” to go through.
Illustration by TradingView
Nov 302021
Nvidia wakes up from its nap
Nvidia rebounds as the Omicron drama dies down just long enough for investors to focus on Friday’s analyst upgrade.- The stock was up nearly 6% on Monday after a new Covid strain gave the term “Black Friday” a new meaning last week and sent prices sinking.
- The drama overshadowed bullish coverage from BofA, which doubled down on its $381 price target and suggested that the persisting chip shortage would will mean solid demand and strong pricing power.
- Its CEO has big ideas for the future, with plans in motion to use its tech to build AI avatars for the real and meta worlds.
Luis Vasconcelos / Unsplash
Nov 222021
Another investigation to the pile
Strong earnings may be strengthening the share price, but trouble is brewing on yet another continent for Nvidia’s embattled Arm takeover.- Nvidia ended Friday up 4%, adding to Thursday’s earnings-induced gains of 8%.
- But the U.S.'s FTC wants to ruin the fun. Nvidia confirmed that the regulator has joined the list of those concerned about the $40bn takeover – the EU and U.K. have already launched investigations, and China is looking into the deal.
- The deal won’t go through unless given clearance from all four countries, which is looking less and less likely.
