NVIDIA Corp (NVDA.O)_ Preview_ Expect Smaller “Beat & Raise” on Blackwell Transition

Summary of NVIDIA Corp (NVDA.O) Conference Call Company Overview - Company: NVIDIA Corp (NVDA.O) - Industry: Graphics Processing Units (GPUs) and related technologies - Headquarters: Santa Clara, CA - Founded: January 1993 by Jen-Hsun Huang and partners Key Financial Insights - Upcoming Earnings Report: NVIDIA is set to report its October quarter results after market close on November 20, 2024 - Sales Projections: - October Quarter: Total sales expected at $33 billion, with data center sales at$29 billion, slightly below expectations of $34 billion and$30 billion respectively [8] - January Quarter: Total sales projected at $36.5 billion, with data center sales at$32 billion, compared to expectations of $37.5 billion and$33 billion [8] - Gross Margin: Expected to be 73% for January quarter, approximately 30 basis points below market expectations due to a higher mix of H200 products [8] - Earnings Per Share (EPS): - FY2025 EPS revised up by $0.10 to$2.78, FY2026 by $0.55 to$4.86, and FY2027 by $0.08 to$5.59 [8] - Target Price: Increased from $150 to$170 based on a consistent 35x P/E ratio on revised CY25 EPS [8] Market Performance - Current Share Price: $145.26 as of November 11, 2024 - **Expected Total Return**: 17.1$3,563.23 million [9] Growth Projections - Sales Revenue Growth: - 2024: 125.9% increase - 2025: 105.9% increase - 2026: 75.2% increase - 2027: 19.5% increase [15] - Core NPAT Growth: Expected to grow from $8.37 billion in 2024 to$152.55 billion in 2027 [15] Risks and Challenges - Competitive Risks: Potential loss of market share in gaming could negatively impact stock performance [30] - Adoption Rates: Slower-than-expected adoption of new platforms may lead to lower sales in data centers and gaming [30] - Market Volatility: Fluctuations in the automotive and data center markets could add volatility to stock performance [30] - Cryptomining Impact: Changes in the cryptomining landscape could affect gaming sales [30] Investment Strategy - Recommendation: Maintain a "Buy" rating on NVIDIA due to strong secular growth opportunities in AI [28] - Valuation: Target price reflects a valuation based on a 35x P/E multiple, aligning with historical averages [29] Conclusion NVIDIA Corp is positioned for significant growth driven by its leadership in GPU technology and expanding opportunities in AI. However, investors should remain cautious of competitive pressures and market volatility that could impact future performance.