29 August 2024
If you are covering Nvidia’s latest financial results, please find below a comment from Ben Barringer, technology and media analyst at Quilter Cheviot:
“There was a lot of nervousness about the latest set of results around Nvidia, and while it produced a strong set of numbers, investors have become accustomed to better ones of late. Nvidia has grown to a point where there is little room for error and any sign of slowing or normalisation of growth will have an outsized effect on the share price. This being the smallest beat in six quarters, and the fact guidance for gross margins and costs are weaker was enough to get people to hit the sell button in afterhours trading.
“It is going to become harder and harder for Nvidia to keep shooting the lights out as comparisons get tougher to beat. But demand for AI remains strong and management talk about the endless possibility in every sector for AI to make a difference. The return on investment is thus vast, albeit slightly unproven to date. Nvidia also announced the delay in the Hopper product has been fixed and this will come on stream soon, meaning earnings from this will be captured this year and companies will have confidence in placing orders. The company also announced a $50bn share buyback, which is no bad thing and not to be sniffed at.
“While the share price has been knocked after hours, there remains little fundamentally wrong with Nvidia. This is a company that continues to deliver strong growth, but this growth will eventually moderate. People will be watching closely for something more sinister, but for now Nvidia remains in a good place and will be happy with its roadmap for future growth.”
