Research archive for NVDA

There are never any winners in a war, whether it's military combat or a trade dispute. Trade relations between China and the US have been deteriorating since Trump initiated a trade war and Biden carried it on. Recently, China's increased focus on Taiwan has led to an escalation in tensions.

On Tuesday Nvidia launched a new set of GPU chips which will be four times faster than their current range. Nvidia's new chip architecture is named after the 19th-century English mathematician Ada Lovelace, generally considered to be the world's first computer programmer.

There is a lot of debate about whether Meta will crack the metaverse. The gaming companies have a head start because gamers have embraced the virtual world already. Meta is going full steam ahead and has indicated that it will invest $10 billion a year to create virtual worlds for their social media users.

Last week the Nvidia share price took a big hit after the US government imposed new export restrictions on high-end computer chips to China. The Feds are worried that these supercomputers can be used for military advancements. Nvidia was expecting $400 million worth of sales to China in the next quarter.

Nvidia and AMD have become the two main players in the GPU market. According to the latest monthly hardware survey by Steam, the leading online store for video games, 76% of participants in the July questionnaire used a card with an Nvidia chip. Bye bye AMD!

On Wednesday night Nvidia released second-quarter results. We knew these numbers would be ugly because they warned us two weeks ago. I covered that special update here. Basically, the high demand for high-end chips from crypto miners and gamers has fallen faster than expected.

The semiconductor industry is naturally cyclical. It has been that way since computing and chips became mainstream items. They are complex to manufacture with long lead times in developing fabrication plants, so managing the inventory can be tough. We have 522 clients that own Nvidia, the leading semiconductor chip maker on the planet. We need to understand these cycles in order to manage expectations.

The technological advancements we enjoy today are the fruits of the hard work done by generations before us. As Sir Isaac Newton said, "If I have seen further it is by standing on the shoulders of giants." The great thing about technological progress is that it's exponential.

High-end chipmaker Nvidia had very good quarterly numbers out last week, with revenue up 46% since last year and profits up by 55% to a record high.

Here's a fun article in the Wall Street Journal about Nvidia, written by Dan Gallagher. The headline is Nvidia's Trillion Dollar Dreams.

I'm continuing my theme from yesterday about companies struggling to balance production capacity with the demand for their product. In good times they ramp up capacity as quickly as possible, incurring significant costs, but when demand drops, they are stuck with too many expensive employees and equipment.

Last week, Nvidia reported its fourth-quarter earnings that beat analysts' expectations and provided a strong outlook for this quarter thanks to massive demand. The chipmakers' revenues came in at $7.64 billion, up 53% year-on-year as Data Center sales rose by 71% and its core gaming business (50% of sales) showed no sign of slowing down.

On Wednesday night, Nvidia released their third-quarter numbers. The wait ahead of results from a stock that has been on a hot streak is always anxiety-inducing. Will the reported numbers match sky-high analyst expectations? So far this year, Nvidia shares are up 162%. It's touted as the next company to reach $1 trillion in market capitalisation (it's currently at $730 billion).

I was supposed to report to you on Nvidia's second-quarter results last month. Michael allocates each of us a list of companies to comment on each earnings season, and I dragged my heels, until now.

Here is some exciting news. One of our core holdings, Nvidia, announced yesterday that they will start making high-end server microprocessors. The new chips are named Grace after a pioneering computer scientist called Grace Hopper, and will be available at the beginning of 2023.