Notably, while Nvidia has had a commercial presence in the U.K. for decades, it has amped up its number of strategic programs in the island nation by quite a bit in recent years. Perhaps the most noteworthy among them occurred when Nvidia announced and funded Cambridge-1, touted to be the U.K.’s most powerful supercomputer. Aimed at AI research in healthcare and life sciences, Cambridge-1 was launched in mid-2021 with founding partners that included British pharma giants such as AstraZeneca (AZN), GlaxoSmit ...

For more on what this may all mean or not mean, let's bring in Bernstein senior analyst Stacy Rasg. Stacy kind of hit with a an antirust accusation and the stock market snores. >> Well, you got to remember they're not selling anything in China right now. >> They want to >> they they want to and actually the reason we're they're not selling right now it is because of the China side.The US seems to be getting a little more flexible on that. Um it's sort of unfortunate because you know supposedly the antitrust ...

Super Micro Rises, Begins Nvidia Blackwell Ultra Shipments. Hear about it on the Bloomberg Stock Movers report. https://t.co/XjhSF8JcaY ...

Core Viewpoint - Nvidia has positioned itself as a leader in the AI chip market, experiencing significant revenue growth and projecting further opportunities in AI infrastructure spending [2][3][10]. Group 1: Nvidia's Market Position and Growth - Nvidia has emerged as the winner in the early phases of the AI boom, focusing its chip development on the AI market, which has proven to be a successful strategy [2]. - The company's annual revenue surged from $27 billion to $130 billion in just two years, with a recent quarterly revenue increase of 56% to approximately $46 billion [3]. - Nvidia's stock has appreciated over 1,100% in the past three years, reflecting strong investor confidence [4]. Group 2: Product Development and Innovation - Nvidia has developed a comprehensive platform of AI products and services catering to a wide range of customers, from startups to large cloud service providers [6]. - The company has committed to annual chip updates, making it challenging for competitors to catch up, with recent launches including the Blackwell architecture and the upcoming Rubin innovation [7]. Group 3: Future Revenue Opportunities - Jensen Huang predicts that AI infrastructure spending could reach $4 trillion by the end of the decade, with Nvidia capturing at least 25% of data center spending, potentially translating to a $1 trillion revenue opportunity [10]. - If infrastructure spending aligns with Huang's forecast, Nvidia's revenue could significantly increase beyond the current record of $130 billion [11]. Group 4: Customer Loyalty and Cost Efficiency - Nvidia's focus on energy efficiency and performance per watt may lead to lower total costs for customers, fostering long-term loyalty as companies invest in AI infrastructure [12]. - The ease of integrating Nvidia's solutions across various cloud platforms may further enhance customer retention [12]. Group 5: Long-term Growth Potential - Nvidia's growth opportunity may still be in its early stages, suggesting that more quarters of earnings gains could be ahead [13]. - Despite potential short-term challenges, the company's long-term prospects remain strong, making it an attractive stock for investors [14].

Group 1: AI Investment Trends - Major tech companies, including Meta and Alphabet, have raised their capital spending forecasts, driven by ongoing investments in AI infrastructure [1][3] - The AI boom is expected to generate significant revenue gains and cost savings across various industries, with predictions of the AI buildout being valued at $3 trillion to $4 trillion by the end of the decade [2][3] Group 2: Nvidia's Position - Nvidia is the leading designer of graphics processing units (GPUs) essential for AI tasks and has developed a comprehensive range of AI products and services [6] - A substantial portion of Nvidia's sales comes from major tech companies like Meta, Alphabet, and Microsoft, all of which are heavily investing in AI [7] - Nvidia reported double-digit revenue growth and noted extraordinary demand for its latest chip, indicating strong market interest in its offerings [9] Group 3: Taiwan Semiconductor Manufacturing's Role - Taiwan Semiconductor Manufacturing Company (TSMC) produces approximately 90% of advanced chips, benefiting from the growth of various chip designers during the AI boom [10] - TSMC announced a $165 billion investment in U.S.-based chip manufacturing, which includes the establishment of multiple advanced production facilities [11] - TSMC has a strong earnings track record with expectations of continued demand for AI-related chips, making it a favorable investment during the AI revolution [12]

Core Insights - Nvidia has experienced significant stock performance, with a 1,200% increase over the past five years and double-digit gains in 2023, making it a top player in the AI sector [1][2]. Company Overview - Nvidia transitioned from primarily serving the gaming market to focusing on AI by developing graphics processing units (GPUs), leading to its dominance in the AI chip market with billions in earnings and substantial growth [4]. - The company has maintained its competitive edge through continuous innovation, launching new architectures like Blackwell and the upcoming Rubin, with the AI market projected to exceed $2 trillion in the coming years [5]. Upcoming Events - Nvidia is scheduled to present at the Goldman Sachs Communacopia + Technology Conference on September 8, where updates on key growth factors, such as potential chip sales in China and the Rubin release timeline, are anticipated [6][7]. - The U.S. government has recently agreed to grant Nvidia chip export licenses to China, contingent on a 15% revenue share, although specific implementation details are still pending [8]. Investment Considerations - Currently, Nvidia trades at approximately 38 times forward earnings estimates, which is higher than a few months ago but still considered reasonable given its earnings potential [10]. - Long-term investment strategies are emphasized, suggesting that short-term price movements around the September 8 presentation may not significantly impact overall returns [11].

Core Insights - Nvidia's latest earnings report, while showcasing strong financial performance, contains subtle warnings that may indicate potential challenges ahead for the company and its investors [3][10]. Financial Performance - Nvidia reported $46.7 billion in net sales for the fiscal second quarter, representing a 56% increase year-over-year, and earnings per share (EPS) of $1.05, exceeding Wall Street expectations for the 11th consecutive quarter [5]. - The data center segment was the primary driver of sales, accounting for over 88% of total revenue, with strong demand for the Blackwell and Blackwell Ultra chips [6]. Gross Margin and Pricing - The GAAP gross margin for Nvidia was 72.4%, down 270 basis points from the previous year, but it marked the first sequential improvement in over a year, indicating strong pricing power for its AI hardware [7][8]. Revenue Concentration Risks - Nvidia's revenue concentration is a concern, with two customers accounting for 39% of total revenue in the latest quarter, highlighting increasing reliance on a narrow customer base [11]. - The two major customers are likely Meta Platforms and Microsoft, both of which are developing their own AI-GPUs, potentially impacting Nvidia's future sales [12][13]. Future Product Development - Nvidia's strategy to introduce a new advanced AI chip annually may lead to rapid depreciation of existing GPUs, which could affect upgrade cycles and gross margins if customers opt for cheaper alternatives [14]. Share Buyback Program - Nvidia's board approved an additional $60 billion share repurchase program, raising concerns about the company's ability to find high-growth investment opportunities, especially after a significant stock price increase [16][17]. - The lack of insider purchases since December 2020 and significant stock sales by executives over the past five years further complicate the narrative around the company's financial health [18].

Investment Rating - The report maintains a "Buy" rating for companies benefiting from the AI supply chain, specifically for 中际旭创 (300308 CH) and 生益科技 (600183 CH) [2][4]. Core Insights - AI infrastructure investment continues to grow, with NVIDIA's strong performance indicating sustained demand. NVIDIA's revenue for Q2 FY26 reached $46.7 billion, a 56% year-over-year increase and a 6% quarter-over-quarter increase, exceeding Bloomberg consensus estimates [2][4]. - The management expects Q3 revenue to be $54 billion, indicating a 16% quarter-over-quarter growth, which is significantly higher than previous quarters [2][4]. - The report highlights the robust growth in NVIDIA's data center revenue, which increased by 17% quarter-over-quarter, driven by high sales of Blackwell chips and strong network business growth [4]. Summary by Sections NVIDIA Performance - NVIDIA's Q2 FY26 revenue was $46.7 billion, with a Non-GAAP gross margin of 72.7%, expected to rise to around 75% by year-end [2][4]. - The net profit for Q2 was $25.8 billion, reflecting a 52% year-over-year increase and a 30% quarter-over-quarter increase [2][4]. Market Outlook - Management anticipates that the capital expenditure of the four major cloud providers will reach $600 billion by 2025, with market opportunities potentially expanding to $3-4 trillion by 2030 [4]. - The report emphasizes the improving return on investment for AI infrastructure, with GB200's ROI projected to be 10 times [4]. Geopolitical Considerations - NVIDIA's sales outlook in China remains uncertain due to geopolitical tensions, with potential revenue from H20 products estimated between $2 billion to $5 billion if conditions improve [4].

Investment Rating - The investment rating for the company is "Buy" [2][19]. Core Views - The report highlights that Blackwell deployment is progressing smoothly, while there are uncertainties regarding business in China. The management has indicated that some Chinese customers have received export licenses from the U.S. government, but NVIDIA did not deliver H20 products in FY2Q26. Excluding revenue from China, the management's guidance for FY3Q26 revenue is a median of $54 billion, with a gross margin median of 73.5% [6][11]. - The report also notes the release of Spectrum XGS, which is expected to enhance the optimization capabilities of data center networks and could generate annualized revenue of $10 billion. The Rubin series of new chips is in the foundry stage and is expected to launch in 2H26, with significant upgrades over Blackwell [6][10]. - The target price for NVIDIA has been raised to $204, corresponding to a 33x FY27E price-to-earnings ratio, reflecting adjustments in revenue forecasts for FY2026 and FY2027 [6][11]. Financial Overview - Revenue projections for the company are as follows: - FY2024: $60,922 million - FY2025: $130,497 million - FY2026E: $207,043 million - FY2027E: $269,112 million - FY2028E: $287,367 million - Year-on-year growth rates are projected at 125.9% for FY2024, 114.2% for FY2025, 58.7% for FY2026, 30.0% for FY2027, and 6.8% for FY2028 [5][21]. - Net profit estimates are as follows: - FY2024: $32,312 million - FY2025: $74,265 million - FY2026E: $110,138 million - FY2027E: $152,118 million - FY2028E: $158,785 million - Earnings per share (EPS) projections are: - FY2024: $1.30 - FY2025: $2.99 - FY2026E: $4.44 - FY2027E: $6.19 - FY2028E: $6.46 [5][21]. Market Performance - The stock price closed at $181.60 with a target price of $204.00, indicating a potential upside of 12.3% [19][20]. - The company has shown a year-to-date price change of 34.16% and has a market capitalization of $4,396,148 million [4][21]. Product Strategy - The report discusses NVIDIA's "dumbbell strategy," focusing on developing both "highly standardized" and "highly open" products. This includes the Blackwell GB200/300 NVL72 cabinet products and the NVLink Fusion and Spectrum-XGS Ethernet connection systems, which aim to enhance compatibility with various accelerators and improve market competitiveness [9][10].

Core Insights - Nvidia reported Q2 FY2026 revenue of $46.7 billion, exceeding market expectations of $46.1 billion, and representing a 55% year-over-year growth [1][2] - The company's net profit was $26.4 billion, a 60% increase year-over-year, translating to an EPS of $1.04, also above the expected $1.01 [1] - Despite the strong financial results, Nvidia's stock experienced a decline, dropping 0.09% to $181.6 per share, with a post-earnings drop exceeding 5% at one point [1][2] Financial Performance - Nvidia's gross margin decreased to 72.4% in Q2 from 75.2% in the same period last year, although it remains significantly higher than the pre-ChatGPT average of around 60% [1] - The data center segment, a key growth driver, reported revenue of $41.1 billion, a 56% year-over-year increase, but fell short of the market expectation of $41.34 billion [3] - For Q3, Nvidia projects revenue of $54 billion with a gross margin between 73.3% and 73.5%, indicating a potential slowdown in growth compared to previous quarters [3] Geopolitical Factors - A significant geopolitical factor affecting Nvidia is the restriction on H20 chip sales to China, which has impacted revenue and led to a $4.5 billion loss in Q1 due to inventory write-downs and order cancellations [4][5] - Although the U.S. government has decided to restore H20 exports to China, Nvidia has yet to realize any revenue from these sales, despite some Chinese customers obtaining licenses [4][5] - Nvidia confirmed approximately $650 million in revenue from H20 sales to non-restricted customers outside China, but has not sold any H20 products to Chinese clients [5] Market Outlook - Nvidia's CEO highlighted the ongoing demand for AI infrastructure, estimating that spending in this area could reach $3 trillion to $4 trillion by 2030 [6][7] - The company is focusing on the AI infrastructure market, with significant growth opportunities anticipated, particularly with the upcoming Blackwell AI platform [6] - Analysts suggest that Nvidia's future performance will depend on factors such as customer demand, supply chain dynamics, long-term revenue, and geopolitical conditions [7]