Nvidia Q2 - Huge Growth

On Wednesday evening after the market closed, Nvidia reported their latest numbers. The company beat both top-line and bottom-line expectations. They reported revenue of $3.9 billion, up 50% and Net Income of $1.3 billion, up 79%. Thanks to Nvidia's push into data centres through its purchase of Mellanox and Cumulus Networks, data centre revenue was up 167% for the year.

For long-standing Nvidia shareholders, you might remember that Nvidia had a surge in 2018 thanks to the massive demand for GPU's from the crypto-mining community. Shortly after the Bitcoin bubble popped, so too did the demand for GPU's. Thanks to solid growth in the gaming division though, Nvidia now has sales 15% higher than the high-water mark of the Bitcoin boom.

Good news for the stock is that the company guided much higher than the street was expecting. Management has guided for revenue growth for the next quarter of 46% y/y, which is 10% higher than expectations. Assisting in the revenue growth is a tailwind from a product launch on the 1 September, where a new generation of GPU's will be revealed.

A large part of Nvidia's success is from their gaming division, but future growth is going to come from data centres. As Paul mentioned yesterday, Nvidia is in talks to buy CPU maker ARM. Owning ARM would allow Nvidia to supply end to end hardware for data centres. As more of the world moves online and as the Internet of Things takes off, the globes need for data centres is going to be massive.

We are still very bullish on Nvidia.