Is there a big possibility that NVIDIA's financial results will have an impact on stock prices?! Explain the points of interest from a short-term perspective!
The stock that made the biggest leap forward in US stocks in 2023 and came into the spotlight is definitely NVIDIA. Since the beginning of the year, NVIDIA's stock price has risen 2.3 times,PER is 200 timesIt has exceeded. Currently, policy interest rates and long-term interest rates in the United States are at a high level, so sales have been on the rise for high-tech giants in particular. While NVIDIA is taking a break from the July high,Since analysts raised target stock prices before financial results, the window was opened on 8/21 and there was a strong rise.
As stock prices fluctuate like this, NVIDIA will have a major event called financial results. According to Moomoo's financial calendar, NVIDIAAfter the market on 8/23Financial results will be announced on Results that greatly exceeded market expectations were announced in the previous financial results, and stock prices, which were pleasantly surprised, soared 24%.There is a good possibility that the financial results will have a big impact on stock prices this time as well.
I will explain 4 points that may have a big impact on NVIDIA's stock price in the short term!
1. Comparing actual results with guidance analysts' predictions
After the semiconductor industry experienced a period of slump that spanned more than a year,Revolutionary Advances in Artificial Intelligence (AI)Demodulation began due to demand for semiconductors brought about by.NVIDIA boasts the world's largest market share of GPUsAmid the trend of the AI boom and increased demand, it is recognized that it has the greatest room for growth.
So at this stage,There is a possibility that there will be a big discrepancy between analysts' predictions and NVIDIA's actual performanceThere is. The announcement of financial results for Q1 2024 was a result that surpassed almost anyone's expectations, and it was precisely because it was a surprise that stock prices skyrocketed in a short period of time after the financial results were announced. Since the previous financial results were like this, it seems undeniable that the market has expectations for the current Q2 financial results.
Take revenue as an example. According to moomoo, analysts are forecasting Q2 revenue of 11.07 billion dollars, which is almost in line with guidance published by NVIDIA. What if actual earnings were this forecastsignificantlyIf it exceeds, there is a possibility that it will have a significant positive impact on short-term stock prices. Conversely, if actual earnings fall short of expectations, there could be a negative impact on short-term stock prices.
If NVIDIA's performance is as expected, the market already has high expectations for this brand, soThere is a possibility that this sense of expectation is already reflected in stock prices.In order to further boost stock prices, simply meeting expectations is not enough, and numbers and surprises that exceed expectations may be necessaryI don't know.
In addition to our achievements,conference callNVIDIA's management team will show results for the next quarter at (financial results briefing)guidanceIt's also important to pay attention to. If the guidance significantly exceeds analysts' expectations, there is a possibility that it will have a positive impact on stock prices. Conversely, if guidance falls short of expectations, it is safe to think that there is a possibility that it will have a negative impact on stock prices.
2. Data center revenue
In the past, NVIDIA's data center division was a major growth engine, yet it only accounted for 37% of revenue in the first quarter of 2021. However, just 3 years later, in the first quarter of 2024, earningsabout 60%It has grown to the point of taking over! Among semiconductors, NVIDIA has used GPUs (Graphic Processing Units) for games as the main axis of revenue, but since then demand for GPUs for AI has exploded,We have stronger growth expectations for the data center division to which GPUs belongYou can think of it.
See data center revenue growth trends.
Data center revenue in Q1 2024 was able to break away from the previous slump and achieved double-digit growth both year-on-year and quarter-over-quarter. Q2 financial results are semiconductors,Above all, it's important for testing GPU demandIt's going to be
Announced in the most recent Q1,Strong revenue guidance of $11 billion is based on expectations of increased demand for data centersThis is because it can be thought of. Therefore, thisAccelerated data center growthIt's worth paying attention to.
3. inventory level
inventory levelis an important index for measuring changes in the supply and demand cycle and growth expectations in the semiconductor industry, which undergoes cyclic (sensitive to the economy) supply-demand fluctuations. When demand declines and excess supply occurs,Corporate inventory levels have risenI will. If that were the case,Sales pressure to handle inventory is increasingHowever, this will weigh heavily on stock prices. Conversely, when demand improves from the bottom up and increases, inventory levels decrease and sales prospects improve (if there is demand, inventory can be handled).
As an indicator of changes in inventory levels,Net sales inventory ratioThere is (inventory/sales ratio).The higher the sales/inventory ratio, the higher the inventory level and the greater the sales pressureI will show it to you. For example, at NVIDIA, the sales/inventory ratio has been rising continuously since 2022/Q4, so check the stock price for the same period. You'll see that it's falling.
However, in 2023/Q1, NVIDIA'sInventories are decliningWe have achieved great results (we were able to handle the inventory that had been piled up).Net sales inventory ratioFrom 85.3% at the end of fiscal 2023 to 64.1%reducedI did. Therefore,As for upcoming financial results reports, the sales/inventory ratio continues to decline,about 35%Whether it will quickly return to the level ofIt is necessary to observe. Also, it seems that the reason why financial institution analysts raised NVIDIA's target stock price before financial results were announced was an increase in demand for GPUs. When demand is strong, the sales/inventory ratio... Now I understand that the decline is the theory!
4. profitable
Whether or not profitability can recover quickly is also one of the major points of interest.
In the past few quarters, NVIDIA was at a stage where it gradually began to break out of the downward cycle of the semiconductor economy,Gross profit margin(Gross profit margin) has risen and reached a high level of around 65% in Q1 2024. Even in future Q2, due to strong demand for GPUs, the bargaining power of the company with the No. 1 market share will still be strong,The gross margin ratio is expected to rise further.What if the gross margin ratioA level close to 70%If it can be reached, it can be said that it has met market expectations. It can be seen that GPUs are very profitable at this stage.
NVIDIA'sNet profit marginIf you pay attention, it has risen rapidly even in the last few quarters, reaching 28.4% in Q1. It is at the same level as during the boom period in the semiconductor economyA level above 35%It is also necessary to pay attention to whether net profit margins will increase until now.
Summarize
NVIDIA's financial results may have a major impact on short-term stock prices. Let's review the 4 key points to pay attention to once again.
points① Let's compare how far performance and earnings guidance have been achieved against expectations.Differences can have a significant impact on short-term stock prices.
points② Let's take a look at the revenue status of the data center.GPUs in this division are the core of NVIDIA, and we need to keep an eye on their acceleration of growth.
points③ Let's take a look at inventory levels. Net sales inventory ratioIt is necessary to observe whether it continues to decline.
points④ Let's take a look at profitability. Total profit marginwithNet profit marginIt will continue to rise, and it is necessary to observe whether the semiconductor economy returns to boom levels. Keep an eye out for how NVIDIA's stock price reacts after the financial results are announced! In moomoo,The NVIDIA conference call will be streamed live! (Japanese machine translation will be added with subtitles) Please join us for the concert!If you have an opinion or analysis, please share it with the community.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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KIMIHIKO : NVIDIA:
FT coverage
The number of units produced, the top AI processor H100, in 2024
We plan to increase it by at least 3 times to 1.5 to 2 million units
If production increases drastically from the 500,000 units expected this year
AI processors are already there
If it's sold out by 2024.
https://www.ft.com/content/c7e9cfa9-3f68-47d3-92fc-7cf85bcb73b3
トゥルーノース : Since expectations for AI are high, the development where sales come out regardless of results is clearly a change in the tide. The sense of incongruity I felt after the settlement of SMCI, which is the same AI-related stock, remained as it was. The rise in long-term US interest rates has begun to have an adverse effect on high-tech growth stocks. The 10-year interest rate surpassed the high in October last year and reached 4.34% on 8/21. There are also observations that the Fed's financial crackdown will continue. Since the beginning of the year, only AI-related stocks have risen in American stocks. Investors may need to be prepared that all of this year's gains will be stripped away. Don't Fight Fed Pay attention to the trading trends of large investors!