Nvidia is rocking the world again! JPMorgan Chase early "bad news": earnings blowout may be bad news
Wednesday after the U.S. stock market, all eyes are focused on Nvidia fourth-quarter earnings, investors' expectations are also very high. JPMorgan Chase released a report on Wednesday saying that even if NVIDIA reports results and guidance that exceeds investor expectations, the stock could see a negative reaction.
JPMorgan said of data center revenue: "If the GPU giant can post excellent numbers, and by 'excellent' I mean data center revenue of over $20 billion in the fourth quarter, suggesting an acceleration of data center revenue growth in the first quarter, then the stock could be fine. But it also raises the question of whether supply is improving."
For months, NVIDIA's H100 GPU chips have been in tight supply due to soaring demand. Last summer, the mismatch between supply and demand was so severe that Elon Musk said Tesla wasn't buying fast enough.
At the time, Musk said on Tesla's second-quarter earnings call: "We use a lot of NVIDIA hardware. As soon as NVIDIA can deliver, we'll take it." According to Musk, NVIDIA has too many customers competing for its products. Even though the company has prioritized some of Tesla's orders, NVIDIA still can't deliver the number of chips Tesla needs.
But if supply constraints start to ease, it could be a bad sign for NVIDIA, as it could lead to oversupply, which is not uncommon in the semiconductor industry.
JPMorgan said, "The larger the guidance is exceeded, the more the market will assume that supply is improving, and an inventory correction could occur in the second half of 2024."
NVIDIA stock faces downside risk after surging sharply over the past year. NVIDIA stock has an implied volatility of 11% after earnings. JPMorgan said it would be "absolutely horrible" if NVIDIA's results fall short of analysts' expectations.
JPMorgan said : "Bad is bad, good is good/bad, but too good may be bad."
NVIDIA earnings report shows that the fourth fiscal quarter of 2024 revenue of $22.1 billion, an increase of 265% year-on-year, an increase of 22% from the previous year, exceeding the market expectation of $20.41 billion, another record high; net profit of $12.285 billion, an increase of 769% year-on-year. In terms of sub-businesses, data center revenue in a single quarter was $18.4 billion, an increase of 409% year-on-year, an increase of 27% year-on-year, hitting another record high. $NVIDIA(NVDA.US$
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
