Despite NVIDIA (NASDAQ: NVDA ) (TSX: NVDA:CA ) reporting 2024-Q4 (and 2024 full year) earnings on February 26, 2025, that were perceived to beat estimates , its stock price slumped the next day, opening up at $135/share and closing at $120/share, a declineAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not ...

Core Insights - Palo Alto Networks introduced Prisma SASE 5G to enhance security for enterprise 5G deployments, collaborating with seven industry leaders to provide comprehensive security solutions [1][4][6] - The rise of 5G connectivity necessitates robust security measures due to increased cyber threats, particularly those leveraging AI for sophisticated attacks [2][3] - The company emphasizes the importance of Zero Trust security and AI-powered solutions to protect against evolving threats in the 5G landscape [6][12] Group 1: Product and Service Offerings - Prisma SASE 5G enables service providers to deliver seamless security for enterprise customers, integrating with existing 5G networks to enhance security and reliability [4][6] - The solution offers SIM-based authentication for secure connectivity across all 5G devices, maintaining granular policies and visibility [6][11] - Palo Alto Networks' partnerships with companies like Singtel and NTT DATA aim to enhance enterprise security and performance through integrated solutions [5][11] Group 2: Industry Trends and Challenges - The demand for 5G connectivity is growing rapidly, driven by the hybrid workforce and the need for secure connections in various sectors, including autonomous AI applications and manufacturing [2][8] - Cybersecurity teams prefer to apply familiar technologies to 5G networks, indicating a need for service providers to bridge traditional security practices with new 5G demands [8] - The evolving threat landscape, characterized by AI-driven attacks, requires continuous innovation in security solutions to protect critical infrastructure [3][7]

Core Insights - NVIDIA has chosen RISC-V as its embedded microcontroller architecture, marking a significant shift from its previous Falcon processors, with an estimated shipment of around 3 billion Falcon processors over 10 years and a projected shipment of over 1 billion RISC-V processors by 2024 [2][13]. Group 1: Transition to RISC-V - The transition from 32-bit Falcon cores to RISC-V was driven by the need for 64-bit capabilities, with NVIDIA developing various RISC-V cores for different applications, including a dual-issue out-of-order core and a 32-bit version for space-constrained applications [3][4]. - NVIDIA's RISC-V microcontrollers are integrated into their products, with each chip typically containing 10 to 40 RISC-V cores depending on the configuration [2]. Group 2: Custom Extensions and Applications - NVIDIA has developed several custom extensions for RISC-V, enhancing performance and security, including a unique 2kB page size extension that improves legacy software performance by 50% [5][6]. - The Peregrine subsystem, which includes RISC-V cores and various peripherals, allows NVIDIA to flexibly deploy over 30 system control and management applications without the need for independent development for each application [6][9]. Group 3: Software and Security - All applications utilize a single software stack, enabling significant reuse of components such as boot, operating systems, and libraries [7]. - NVIDIA employs an internal security team to identify vulnerabilities, and the Peregrine subsystem's architecture allows for the isolation of different software applications, enhancing security [8][11]. Group 4: Key Reasons for Choosing RISC-V - Customization capabilities allow NVIDIA to optimize chip designs by using the basic ISA as a building block and adding specific extensions [13]. - Hardware/software co-design ensures that hardware is optimized for software workloads, improving efficiency and performance [13]. - RISC-V's configuration options enable NVIDIA to avoid over-specification of standard processors, saving costs and development efforts [13][14].

Group 1 - Younger investors tend to favor growth-oriented stocks to build wealth, while older investors shift towards dividend-paying stocks as they approach retirement [1] - The author has been investing since September 2017 and has a long-standing interest in dividend investing since 2009 [1] - The blog "Kody's Dividends" documents the journey towards financial independence through dividend growth investing [1] Group 2 - The article expresses personal opinions and does not provide compensation for the analysis [2] - Seeking Alpha's analysts include both professional and individual investors, who may not be licensed or certified [2]

Core Insights - NVIDIA has rapidly evolved into one of the world's most valuable companies due to its pioneering role in transforming computing through innovative chip and software designs, particularly in the AI era [2][3]. Group 1: Historical Context - The inception of NVIDIA was driven by the observation that a small portion of code in software could handle the majority of processing through parallel execution, leading to the development of the first modern GPU [3][4]. - The choice to focus on video games was strategic, as the gaming market was identified as a potential driver for technological advancements and a significant entertainment market [5][6]. Group 2: Technological Innovations - The introduction of CUDA allowed programmers to utilize familiar programming languages to harness GPU power, significantly broadening the accessibility of parallel processing capabilities [7][9]. - The success of AlexNet in 2012 marked a pivotal moment in AI, demonstrating the potential of GPUs in training deep learning models, which initiated a profound transformation in the AI landscape [11][12]. Group 3: Current Developments - Major breakthroughs in computer vision, speech recognition, and language understanding have been achieved in recent years, showcasing the rapid advancements in AI capabilities [14][15]. - NVIDIA is focusing on the application of AI in various fields, including digital biology, climate science, and robotics, indicating a shift towards practical applications of AI technology [21][38]. Group 4: Future Vision - The future of automation is anticipated to encompass all moving entities, with robots and autonomous systems becoming commonplace in daily life [26][27]. - NVIDIA's ongoing projects, such as Omniverse and Cosmos, aim to create advanced generative systems that will significantly impact robotics and physical systems [37][38]. Group 5: Energy Efficiency and Limitations - The company emphasizes the importance of energy efficiency in computing, having achieved a remarkable 10,000-fold increase in energy efficiency for AI computations since 2016 [32][33]. - Current physical limitations in computing are acknowledged, with a focus on improving energy efficiency to enhance computational capabilities [31][32].

Core Viewpoint - The article discusses the evolution and commercialization of humanoid robots, particularly focusing on Apptronik and its Apollo robot, highlighting the challenges and opportunities in the humanoid robotics industry [1][4][26]. Group 1: Development of Valkyrie - Valkyrie, developed by NASA for the DARPA Robotics Challenge, aimed to address disaster response but faced significant operational issues during the competition [2][4]. - Despite its initial failures, Valkyrie influenced the humanoid robotics field, leading to the establishment of startups by team members involved in its development [4] Group 2: Apptronik's Formation and Growth - Apptronik was founded by a team from the University of Texas at Austin, including Luis Sentis, Nick Paine, and Jeff Cardenas, who aimed to create humanoid robots capable of performing various tasks [8][9]. - Initially, Apptronik focused on government contracts, particularly with NASA, to fund its development before seeking external financing in 2022 [10][11]. Group 3: Apollo Robot Launch - In August 2023, Apptronik launched the Apollo humanoid robot, designed for industrial applications to address labor shortages and improve efficiency [14][15]. - Apollo features advanced hardware capabilities, including 32 actuators and modular design, allowing it to perform various tasks safely alongside humans [14][15]. Group 4: Commercialization and Partnerships - Apptronik aims to commercialize Apollo by 2025, with a target price below $50,000, and has begun partnerships with major industrial players like Mercedes-Benz [15][26]. - The company has accelerated its commercialization efforts, seeking to deploy Apollo in various factories to demonstrate its practical applications [24][25]. Group 5: Industry Trends and Future Directions - The humanoid robotics industry is evolving, with companies exploring collaborations with AI firms to enhance robot capabilities [20][21]. - Apptronik is pursuing partnerships with NVIDIA and Google to integrate advanced AI models into its robots, while other firms are considering in-house AI development [20][22]. - The industry faces challenges in generating training data for robots, with industrial environments being a primary focus for data collection [24].

Core Insights - The 2024 Q4 earnings season has been solid, with strong performances from the Tech and Finance sectors, highlighted by record results from Meta Platforms, Apple, and NVIDIA [1][11] Meta Platforms (META) - Meta reported adjusted EPS of $8.02 and record sales of $48.4 billion, reflecting growth rates of 50% and 21% respectively, with net income reaching $20.9 billion, the highest ever for the company [2] - The advertising business performed well, generating revenue of $46.8 billion, exceeding consensus estimates and showing 20% year-over-year growth [3] - User growth continued, with Family Daily Active People (DAP) increasing by 4% year-over-year to approximately 3.4 billion, and average revenue per user rising by 41% year-over-year [4] Apple (AAPL) - Apple achieved adjusted EPS of $2.40 and sales of $124.3 billion, marking growth rates of 10% and 4% respectively, both figures being all-time records for the company [5] - iPhone sales totaled $69.2 billion, reflecting a slight decline of 1% year-over-year, which was below consensus estimates despite the introduction of Apple Intelligence [5] NVIDIA (NVDA) - NVIDIA reported quarterly sales of $39.3 billion, a 78% increase from the previous year, along with adjusted EPS of $0.89, which showed 71% growth year-over-year [7] - Data Center revenue reached a record $35.6 billion, up more than 90% year-over-year and 16% sequentially, surpassing consensus estimates by $2.0 billion [8]

Economic Indicators - The January Personal Consumption Expenditures (PCE) report shows Personal Income increased by 0.9%, significantly exceeding expectations of 0.4% [2] - Personal Spending decreased by 0.2%, contrasting with an expected increase of 0.1% and a prior month's increase of 0.7% [2] - Real Spending also declined by 0.5%, marking the lowest spending figures in nearly four years, while the Savings Rate rose from 3.5% to 4.6% [3] Inflation Metrics - The PCE Index showed a month-over-month increase of 0.3% for both headline and core metrics, aligning with expectations [4] - Year-over-year, the headline PCE decreased to 2.5% from 2.6%, and core PCE decreased to 2.6% from an upwardly revised 2.9% [4] - These figures are viewed positively as they indicate a reduction in inflation pressures, which is favorable for the Federal Reserve [5] Trade and Inventory Data - The January Trade Deficit reached an all-time low of -$153 billion, down from -$122 billion the previous month, indicating significant trade imbalances [6] - Advanced Retail Inventories showed a slight improvement, decreasing by 0.1%, while Advanced Wholesale Inventories increased by 0.7% [7] Bond Market Trends - Bond yields have decreased, with the 10-year yield dropping from 4.77% to 4.26%, and the 2-year yield falling from 4.40% to 4.06% [9] - This decline in yields suggests a cautious outlook on economic growth and may indicate potential for future interest rate cuts [10]

Group 1: Market Overview - Q4 2024 earnings reporting indicates positive trends, but the outlook for 2025 earnings growth has dimmed [1] - Stocks in leadership positions are regaining traction after price dips, suggesting a continued uptrend in the S&P 500, albeit at a slower pace than in 2024 [1] Group 2: NVIDIA - NVIDIA's automotive segment grew nearly 30% year-over-year in Q4, driven by demand for driver-assist technology essential for EVs and autonomous driving [2][3] - Analysts view the automotive segment as a potential billion-dollar revenue stream that will grow in the coming years, aiding in diversification from the data center segment [3] - The consensus price target for NVIDIA has risen, indicating nearly 30% upside potential, with 91% of ratings at Buy or better [4] Group 3: Salesforce - Salesforce reported mixed earnings and weak guidance, leading to lowered price targets, but analysts believe business remains strong with a forecasted 20% upside [5][7] - Highlights include high single-digit growth, substantial margins, and free cash flow sufficient for capital returns, including dividends and buybacks [8] Group 4: 3M - 3M is expected to revert to organic and adjusted growth in 2025, with improving cash flow and capital return outlook [10][11] - Analysts have a positive sentiment for 2025, with a consensus rating of Moderate Buy and a rising price target [11] Group 5: SoundHound AI - SoundHound AI's stock price has pulled back to long-term lows, but the growth outlook remains intact despite NVIDIA selling its stake [12][13] - Analysts rate SoundHound as a Hold, with potential for a 30% gain, possibly reaching $22.50 by year-end [14] Group 6: Shopify - Shopify is among the most upgraded stocks post-Q4 reporting, with a consensus rating of Moderate Buy and potential for at least 10% upside, likely 20% or more by year-end [15][16] - Q4 results showed accelerated growth and strength in both top and bottom lines, with guidance indicating continued strength in 2025 [17]

Financial Data and Key Metrics Changes - Bloom Energy achieved record revenue of $1.47 billion for the full year 2024, an increase of 10.5% from 2023 [32] - Q4 revenue reached $572 million, a 60% increase compared to Q4 2023 and a 73% increase from Q3 2024 [29] - Non-GAAP gross margin for Q4 was 39.3%, up from 27.4% in Q4 2023 [30] - Full year non-GAAP gross margin was 28.7%, an increase from 25.8% in 2023 [32] - Positive cash flow from operations was $92 million for the full year, marking the first time since 2019 [28] Business Line Data and Key Metrics Changes - The service business achieved positive non-GAAP gross margin in all four quarters of 2024, with a full year non-GAAP gross profit of $4 million, a significant improvement from a $33 million loss in 2023 [28][33] - The company reported double-digit product cost reductions for the year, continuing a long-standing trend [34] Market Data and Key Metrics Changes - The data center segment is identified as a strong growth engine, with a robust sales funnel driven by AI applications [18] - The commercial and industrial (C&I) market segments are also strong, with increased demand due to domestic power shortages and the needs of AI data centers [19][20] - South Korea remains a steady market, with ongoing orders through partnerships [22][23] Company Strategy and Development Direction - Bloom Energy is focused on providing timely, reliable, and clean power solutions, emphasizing the importance of distributed power systems [10][11] - The company is expanding its capabilities in heat capture and carbon capture solutions as valuable add-ons to its core offerings [16] - The management anticipates continued growth driven by urgency in power needs from customers, particularly in the data center sector [17] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting 2025 revenue guidance of $1.65 billion to $1.85 billion, with expectations for continued profitable growth [42][44] - The company highlighted the importance of capital efficiency and managing working capital effectively to support growth [55][56] - Management noted that the demand for power solutions is increasing, driven by the urgent needs of customers [102] Other Important Information - The Investment Tax Credit (ITC) provides customers with 40% credits for systems placed in operation in the U.S. by 2028, with potential gross product revenue of $12 billion to $15 billion for Bloom [24][72] - The company has a product backlog of $2.5 billion and a service backlog of $9 billion, indicating strong future revenue potential [36][38] Q&A Session Summary Question: Expectations for more agreements with large utilities in 2025 - Management confirmed ongoing discussions with several utilities for similar arrangements as the AEP deal, emphasizing the advantages of their technology for timely power delivery [51][52] Question: Thoughts on funding growth and capital efficiency - Management expressed confidence in their capital efficiency and ability to grow without needing to raise additional capital in the near term [55][56] Question: Breakdown of backlog components - Management refrained from providing specific details on backlog components but noted strong growth in both data center and C&I sectors [66][68] Question: Clarification on ITC and its impact - Management clarified that the ITC is still available for projects under the Safe Harbor provision, allowing customers to benefit from tax credits through 2028 [72][74] Question: Revenue recognition policies - Management confirmed that revenue is recognized on shipment, not delivery, and has not changed their revenue recognition policies [80][81] Question: Competitive landscape and market dynamics - Management acknowledged competition from gas turbines but emphasized the significant demand for their solutions and the urgency from customers [131][132]