NVIDIA Shares Face Pressure: Were Earnings Bad?

Core Viewpoint - Nvidia's recent quarterly results indicate strong demand and significant growth, despite a negative post-earnings reaction in its stock price [1][14]. Financial Performance - Nvidia reported quarterly sales of $39.3 billion, marking a 78% increase year-over-year and setting a new quarterly record [3]. - Adjusted EPS was $0.89, reflecting a 71% growth year-over-year and exceeding consensus estimates by nearly 6% [3]. - Data Center revenue reached a record $35.6 billion, up over 90% year-over-year and 16% sequentially, beating consensus estimates by $2.0 billion [4]. Product Developments - The Blackwell AI supercomputers have ramped up production successfully, generating billions in sales during their first quarter [6][8]. - Demand for Blackwell is expected to remain strong as companies increasingly invest in AI technologies [11]. Market Position - Despite a 2% decline in stock price over the past three months, Nvidia's shares are considered relatively inexpensive, with a forward earnings multiple of 30.6X, significantly lower than historical highs [11][12]. - The PEG ratio stands at 1.5X, again below historical averages, indicating potential value [11]. Future Outlook - Nvidia anticipates sales of $43.0 billion (plus or minus 2%) for the next reporting period, continuing its growth trajectory [13]. - The overall demand picture remains positive, supported by CEO Jensen Huang's comments on the Blackwell architecture and the increasing need for computational power [14].