Nvidia’s 20% UP: Earnings Call Analysis & Speculations

5 min read

Nvidia Q3 2023 Performance:

AI is taking the world by the storm (we’ve covered how to bet on it with Nvidia here), and the market set tightly, waiting for Nvidia to let us know about the AI rush impact on it’s core business and the report has not disappointed:

  • Quarterly revenue of $7.19 billion, up 19% from previous quarter
  • Record Data Center revenue of $4.28 billion
  • Second quarter fiscal 2024 revenue outlook of $11.00 billion
  • +22% up after the Q3 2023 Earnings Call (post-market)

Now lets take a part Nvidia Q3 Earnings Call

  • Nvidia’s data center business witnessed significant growth, driven by accelerated computing and generative AI.
  • In Q3 and Q4, visibility suggests that data center sales can continue to grow sequentially or sustain Q2 levels.
  • Supply for the second half of the year expected to be substantially larger than H1 to meet growing demand.
  • Anticipate a substantial increase in the second half compared to the first half.
  • Q2 sales demand was strong, and planning for continued demand in the second half.

Competitive Landscape:

  • Competition exists from well-funded and innovative startups worldwide, existing semiconductor companies, and cloud service providers (CSPs) with internal projects.
  • Nvidia’s value proposition lies in being the lowest cost and lowest Total Cost of Ownership (TCO) solution.
  • Accelerated computing is a full-stack challenge that requires optimization across the entire software, library, algorithm, and data center architecture.
  • Nvidia’s expertise in full stack optimization, data center-scale generative AI, and high utilization of its versatile architecture differentiate it in the market.

Importance of Inference in Generative AI:

  • Inference is a major driver of accelerated computing, especially for generative AI used in various applications.
  • Nvidia offers a substantial amount of software in its architecture, including DGX Cloud, AI Foundation, and AI Enterprise, enabling customers to start their work in generative AI and accelerated computing.
  • Customers can build models, deploy AI, and utilize services across multiple clouds, leveraging Nvidia’s software solutions.
  • Nvidia AI Enterprise is the only GPU-accelerated stack that is enterprise safe and supported, providing a complete AI workflow.

Networking Products and Infrastructure:

  • Nvidia’s networking products, including InfiniBand and Ethernet, target different applications in data centers.
  • InfiniBand, with its low latency and high throughput, is designed for AI factories and specific use cases.
  • Ethernet is suitable for multi-tenant cloud data centers with diverse workloads and millions of users.
  • Nvidia’s networking solutions, including DOCA and Magnum IO, enable the connection and efficient operation of thousands of GPUs, supporting high-performance infrastructure for accelerated computing.

Financial Outlook and Market Opportunities:

  • Nvidia expects continued growth and market expansion with accelerated computing and generative AI.
  • Large language models, recommender systems, and vector databases are key applications driving demand.
  • The global data center infrastructure, previously based on general-purpose computing, is transitioning toward accelerated computing for generative AI.
  • Nvidia’s products, partnerships, and software stacks position the company to capture a significant share of the trillion-dollar data center market.

Possible Trading Strategies Post the Earnings Call:

I. Long-Term Investment:

  • Consider a long-term investment approach, capitalizing on Nvidia’s strong growth potential and market position in AI and accelerated computing.
  • Monitor developments in the data center market, partnerships, and software advancements for future growth opportunities.
  • Invest bluntly via a CFD or by purchasing the stock directly from your broker

II. Short-Term Trading:

  • Leverage price volatility following the earnings call for short-term trading opportunities.
  • Utilize technical analysis tools and indicators to identify optimal entry and exit points based on support/resistance levels, moving averages, and trading volume.
  • The stock was spotted +20% post market, once the report hit the market, going short via cfd at open is one option.

III. Options (Forex & CFD) Trading:

  • Explore options strategies to take advantage of potential price movements and manage risk.
  • Evaluate buying call options to benefit from upward price swings or selling put options to generate income.
  • Evaluate Short vs Long, Considering opening trades in both directions

IV. Risk Management:

  • Implement risk management techniques such as setting stop-loss orders and diversifying the portfolio.
  • Stay informed about market news, regulatory developments, and macroeconomic factors that could impact Nvidia’s stock performance.
  • Keep in mind Global recession and geo-political tensions when managing risk on your position

Safe Trading
Team of Elite CurrenSea


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