Josh Brown on Nvidia: The growth is ludicrous

Nvidia stock rose more than 5% in extended trading after it reported earnings on Wednesday for its third fiscal quarter that beat expectations for both earnings and sales.

The company also issued a bullish forecast for revenue in the current quarter ending in January.

Here’s how it did versus Refinitiv consensus expectations for the quarter ending Oct. 31:

Earnings: $1.17, adjusted, versus $1.11 expected, up 60% year over year
Revenue: $7.10 billion versus $6.82 billion expected, up 50% year over year
Nvidia said it expects to report around $7.4 billion in the current quarter, ending in January, higher than analyst expectations of $6.86 billion.

Nvidia stock has been on a big run, with shares up more than 124% year to date. The company has had more demand than it can fill, especially for its hard-to-find GeForce graphics cards that are popular with gamers.

The company has made significant gains in data centers, where cloud providers and big enterprises are turning to the kind of graphics processors made by Nvidia for artificial intelligence applications.

Nvidia reported $2.9 billion in data center sales, up 55% from $1.9 billion in the same quarter last year. Nvidia CFO Colette Kress wrote that the growth was driven by GPU sales to “hyperscale customers,” an industry term that means cloud providers such as Amazon AWS, Microsoft Azure and Google Cloud.

Kress said customers are using the chips for tasks such as understanding human speech and crunching data to offer customer recommendations.

Gaming, Nvidia’s biggest market, reported $3.2 billion in sales, up 42% from $2.27 billion in the same quarter last year. The company said it was primarily due to increased sales of its GeForce consumer graphics processors, but the company said supply remained limited.

Nvidia’s gaming graphics cards now have software that prevents them from being used for cryptocurrency mining, the company said. Nvidia introduced dedicated graphics cards for crypto mining earlier this year to help meet some of the demand. It said it sold $105 million in cryptocurrency-specific graphics cards, down from $266 million in the quarter ending in August.

Nvidia’s automotive business remains a small part of its sales, even as rival chipmakers invest heavily in the hope that it becomes a multibillion-dollar market in the next decade.

Nvidia said automotive sales were $135 million, which was up 8% annually, but down 11% from the previous quarter. Nvidia said the sequential decline occurred because automakers had other supply constraints but that self-driving programs using its processors continue to ramp up.

Nvidia’s professional visualization product line grew 144% annually to $577 million. That business is primarily high-end graphics processors for professionals. The segment continues to grow as firms buy powerful laptop workstations for their staff to use at home.

Last week, Nvidia CEO Jensen Huang suggested the company could be one of the main suppliers for technology companies building the “metaverse,” or a virtual world that some believe will be home to increasing amounts of commerce, recreation and advertising. Nvidia also introduced new software products called “Omniverse Enterprise” that can be used to create virtual characters, interpret speech and create new 3D worlds.

Nvidia is in the process of purchasing Arm, a British vendor for core mobile semiconductor technology. The European Commission opened an in-depth investigation of the transaction last month.

In the company’s filing Wednesday, Kress said the U.S. Federal Trade Commission had expressed concerns about the transactions and that the company was in talks with the regulator to address those concerns.

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[PrettyPabloSZN]

Jon got hot for a second there with josh

[arkadandfortuna]

I’m gonna say it, NVidia has always been in a good position. As a former employee of a consumer electronics distributor, we saw it back in 2017/18 when Bitcoin took off, processors & components were in demand by miners and gamers and were in constant allocation.
Same with recent yrs
And now with the emergence with the Metaverse, companies like NVidia and AMD will continue to grow & expand outside of chips alone.

[furryp]

To think a $20, 000 investment in 2017 is now worth $1, 250, 000. Just insane

[keto]

10, 000 shares?? Why does Jon have to buy 10000 shares of NVDA? Wow I guess these guys are high rollers! I've got 15 shares of NVDA lol!

[willflex]

Jon's face is gold at the beginning lol

[rymn]

Soon to join the trillion $ club no doubt

[cya]

i keep repeating myself: tech is the fuel for our planet, our society, our way of life. its impossible to avoid technology and i dont see any point investing in other sectors than tech. for me thats a no brainer and the only sector with virtually unlimited growth potential.

[arisgod]

Oh please. if NVDA's growth is ludicrous, what do you call QCOM's growth?

NVDA made $1.17 adjustable eps with 7.1 billion revenue vs estimate of $1.11 with 6.82 billion revenue.


QCOMM recently reported $2.55 eps with $9.3 billion revenue vs 2.06 eps with $8.86 billion revenue estimates.

QCOM beat by .44 cents on eps and .44 billion revenue vs NVDA’s beat by 6 cents eps and .28 billion.

And if you want to look at the future, QCOM has every bit as much runway to continue growing as NVDA if not more. Let me tell you what is ludicrous. 69 forward PE to less than 20 PE for QCOM. Now that is crazy but to pumpers at CNBC it makes no difference.

[readynowforever]

Why poor people should shop at NYSE instead of Walmart the Apple store and the Nike store.

[lisainnewarknj]

Break it down Josh. Preach. Let 'em know where we are going and the destination. Amen!

[CHMichael]

2:40 aren't we already doing this?

[jamesm.]

For everybody who’s down 30% in the stock realize that this analysis is still correct;so you can either try to trade it and be silly, or hang on, or if you can, buy more.

[SpiritualSchmuck]

I don't think NVDA should be down at $267 but it is and I'm thinking we go to $240-$250 range. Watching closely for entry

[kaih]

Omniverse metaverse..man, feels bubbly.

[GK-opoc]

Why is this analyst fixated on a 10, 000 share position when obviously, the number of slices in each pizza are different ?

[idt]

This didnt age well, down 30% in 4 months.

[danielliu]

Lol Jon thinks nVidia is still a chip company.

[HEAVENTWA]

When they say "price target, " I take it they mean for 2022, but when in 2022? The beginning, middle or end?

[SpiritualSchmuck]

This was basically the time to sell. But now we getting real close to get back soonish.

[saulza]

I don't understand how Josh Brown is so smart about the potential of Nvidia but totally ignores Tesla. He will live to regret buying GM, which is a total dumpster fire.