On the DC side, the temporary slowdown in revenue growth was due to a pause in customer spending ahead of the launch of NVDA’s new flagship GPU, the Tesla V100. NVDA: Long-Term Growth Looks Promisingīut the sell-off was minor and short-lived because the Data Center and Automotive misses were just short-term noise in very powerful secular growth narratives. It was actually more of a miss, because the beat was driven by what many are considering a one-off tailwind from cryptocurrency mining. The Automotive segment, which has also been on fire recently due to demand ramp for autonomous driving technology, reported revenue of $142 million versus expectations for $146 million. The Data Center segment, which has been on fire due to hyperscale data center demand ramp, reported revenues of $416 million versus expectations for $423 million. Meanwhile, the company’s secular growth segments that investors really care about (Data Center and Automotive) actually fell short of expectations. While that is a current tailwind, how long it lasts is a complete wild card. The big beat was driven by cryptocurrency mining. That isn’t what happened with Nvidia in the second quarter. And by clean, I mean it has to be driven by the company’s secular growth segments. When you do have the growth profile of NVDA stock going into an earnings report (up 60% YTD and with a rich valuation), not only do you need to beat and raise, but the beat needs to be clean. ![]() It was just a natural pullback in a secular growth narrative.Īnd that means the sell-off is an excellent opportunity to buy NVDA stock at a relative discount. That’s because Friday’s post-earnings sell-off wasn’t a bubble popping. And it has since rebounded most of its losses. ![]() And they continue with ferocity.īut Nvidia stock only dropped 5% after its report. A double-beat and higher guide just wasn’t good enough.īut usually when bubbles pop, the sell-offs are huge. Nvidia stock had come into the report up 60% year-to-date, after a monstrous 200%-plus run in 2016, and it was trading at a rich valuation. For a brief moment, it looked like they were right.
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