This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
Nothing could get mighty Nvidia’s (NVDA) stock rocking into the weekend, two days after its much-awaited earnings.
Not founder and CEO Jensen Huang doing three TV interviews in his iconic leather motorcycle jacket on earnings day. Not the usual glowing Wall Street analyst reports where you would think all 61 sell-side analysts are somehow related to Huang.
Not even what l reasoned in a live post-earnings show on my X account was an old-school blowout Nvidia quarter and guide.
Digging more into Nvidia’s report:
-
Almost $60 billion left on its share repurchase plan (thank you, 10-K). It’s likely that is used by Nvidia to buy the post-earnings dip.
-
About an $11 billion paper gain on its investment in struggling Intel (thank you, 10-K)
-
Current-quarter revenue outlook $6 billion ahead of consensus. This was a major reset to expectations.
-
Revenue growth reaccelerating (see chart below).
-
Profit margins sequentially improving.
-
CEO Jensen Huang says “compute demand is skyrocketing.”
“Generational growth at inspirational valuation,” said one Wall Street tech analyst I follow in a client note.
What am I missing here on Nvidia?
Apparently, the next hot catalyst.
“There is no catalyst,” head of Visible Alpha research at S&P Global Melissa Otto said on Opening Bid (see video above).
I thought more on this after the show ended, and Otto has a point.
Nvidia’s investor base knows basically everything coming from the company in terms of new chips. It knows the AI capex build-out story that is driving Nvidia’s business. It knows Huang will always be bullish. It knows Huang is all in on humanoids and self-driving cars.
And at the end of the day, how much more Nvidia stock could retail and institutional investors own at this point? It already likely makes up a huge portion of portfolios!
So what is that unexpected positive surprise coming for Nvidia? No damn clue! If I had to guess, it’s a whizz-bang product from recently acquired Groq to be unveiled at the company’s big GTC event next month.
If you have an idea on the next upside catalyst for Nvidia, get at me on X — I am all ears.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
