Understanding Nvidia Earnings and its long-game

GPU demand is through the roof of the world, and a company with a valuation of 3.5 Billion has suddenly appeared.

Hey Everyone,

It’s hard to put into context the growth and earnings performance we are seeing out of Nvidia. Nvidia’s stock is also lifting semi stocks (entire ETFs, the NASDAQ, etc…) and investor confidence in the beneficiaries around what’s driving Nvidia’s revenue growth.

Nvidia reported results that beat on both the top and bottom lines, with sales climbing 94% year-on-year to $35.08 billion. How can we fully appreciate those numbers at that kind of scale? It makes the rest of the magnificent seven look like value stocks in comparison.

The insane GPU demand means Blackwell is a sure-fire winner. You cannot really understand today’s Semiconductor industry without understanding the rise of Nvidia and this peak demand we are seeing in the mid 2020s.

Nvidia’s datacenter growth showed revenue of $30.8 billion, up 17% sequential and up 112% year on year. Nvidia is the GPU company of the world in 2024, there really isn’t any worthwhile competition.

Nvidia has largely cornered the market for the high-powered chips driving the world’s most advanced artificial intelligence models and even the likes of xAI and Meta are betting big on bigger and better datacenters. If diminishing returns isn’t coming from the actual models, or the world running out of quality data, the datacenter competition means fewer companies can make state-of-the-art frontier models in 2025.

The AI chip is changing the entire trajectory of technology and BigTech stocks. Nvidia and its supplier TSMC, are at the center of the Generative AI era. While some make some interesting contrarian arguments against Nvidia’s dominance, it’s not entirely convincing considering Nvidia’s place in the AI chip market today. Nor is the argument that companies like Amazon can make a dent in their market dominance rational or realistic.

Let’s look at some of Nvidia’s Earnings numbers and why it’s hard to even acknowledge completely what has occured in a relatively short period that included the emergence of ChatGPT, Generative AI and the titanic capex spend by BigTech and Cloud players in AI chips.