Nvidia, proverbs that investors should keep in mind - Lee
August 29, 2024 23:35 JST (excerpt)
There is a saying in Silicon Valley. Hardware is difficult and takes time and cost. This also applies to Nvidia. It demonstrates exceptional skills in the challenge of manufacturing cutting-edge chips required for artificial intelligence (AI) and even a company with a market capitalization of 3 trillion dollars.
As far as I know, Wall Street does not have such a saying. Especially when it comes to technology that changes the world. Therefore, when Nvidia acknowledged some issues with the production of the next-generation AI semiconductor 'Blackwell' on the 28th, traders were shocked and the stock price temporarily dropped 8.4% in after-hours trading. The fact that the revenue for May-July (Q2) increased by only a 'slight' 122% compared to the previous year also affected the stock price. The revenue forecast for August-October (Q3) exceeded the average analyst estimate, but it still fell short. It's as if CEO Jensen Huang had made no effort at all.
It feels a little silly. The Bloomberg Intelligence analyst's observation that Nvidia is facing the market's 'unsustainable high expectations' is correct. The delay in Blackwell is temporary, and thanks to the strong demand that will continue for several months to come, the company's overall margin is still quite large.
There is a saying in Silicon Valley. Hardware is difficult and takes time and cost. This also applies to Nvidia. It demonstrates exceptional skills in the challenge of manufacturing cutting-edge chips required for artificial intelligence (AI) and even a company with a market capitalization of 3 trillion dollars.
As far as I know, Wall Street does not have such a saying. Especially when it comes to technology that changes the world. Therefore, when Nvidia acknowledged some issues with the production of the next-generation AI semiconductor 'Blackwell' on the 28th, traders were shocked and the stock price temporarily dropped 8.4% in after-hours trading. The fact that the revenue for May-July (Q2) increased by only a 'slight' 122% compared to the previous year also affected the stock price. The revenue forecast for August-October (Q3) exceeded the average analyst estimate, but it still fell short. It's as if CEO Jensen Huang had made no effort at all.
It feels a little silly. The Bloomberg Intelligence analyst's observation that Nvidia is facing the market's 'unsustainable high expectations' is correct. The delay in Blackwell is temporary, and thanks to the strong demand that will continue for several months to come, the company's overall margin is still quite large.
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