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hello everyone, today we are going to talk about nvidia, the hottest company in the technology circle. the financial report just released is another "explosive" report card, but do you know? behind this impressive data, there are actually many issues worth our deep consideration. let's take a look at the real situation of this "leading" ai chip company.

financial report highlights: an ai feast

let’s first take a look at nvidia’s “achievements” this time:

revenue? $30 billion! a year-on-year increase of 122%, directly crushing the expectations of wall street analysts.

profits? forget it. non-gaap adjusted eps reached $0.68, up 152% year-over-year.

data center business? it's even crazier, with revenue of $26.3 billion, a year-on-year increase of 154%.

seeing these numbers, you might think: "is this company cheating?" that's right, the ai ​​craze is nvidia's "hack". relying on its absolute dominance in the ai ​​chip market, the company has become one of the biggest winners of this wave of ai.

market reaction: 'mixed' on wall street

but wait! you might ask: “if the results are so good, why did the stock price fall?”

yes, you read that right. despite its impressive earnings report, nvidia's stock price fell more than 7% in after-hours trading. what's going on?

slowing growth expected: although the revenue guidance for the third quarter is still strong, the growth rate is already below 100%. wall street bigwigs are beginning to worry: "how long can this growth last?"

gross profit margin declines: it fell from 78.4% in the previous quarter to 75.1%. although it seems to be a small decline, in the eyes of wall street, it may mean a decline in future profitability.

valuation pressure: nvidia's market value has exceeded 3 trillion us dollars, making it one of the most valuable companies in the world. but do you know? the higher the market value, the harder it is to maintain high growth.

as da davidson analyst gil luria said: "our growth will at least slow down next year, and at some point, revenue will even decline." this concern is not unreasonable. after all, a big tree attracts the wind, and nvidia's current size is no longer a small one.

future challenges: “indigestion” after the ai ​​feast?

although nvidia seems to be the absolute leader in the ai ​​chip market, the road ahead will not be smooth. let's take a look at the major challenges it faces:

intensified competition: old rivals like amd and intel are catching up. what’s worse, even major customers like microsoft and amazon have started to develop their own ai chips. this situation seems to be a case of “raising a tiger to cause trouble”.

supply chain pressure: the production of the next-generation blackwell chip has encountered some minor problems. although the company said that it will be mass-produced later this year, you know, in the technology industry, a little delay can make a big difference.

regulatory risks：this is no small matter. the u.s. department of justice, the european union, the united kingdom, and china are all eyeing nvidia's market position. coupled with the complexity of sino-u.s. relations, nvidia's future in the chinese market is a bit confusing.

customer spending may slow: interestingly, some tech giants have begun to hint at tightening their purse strings for ai investments. this is not good news for nvidia.

nvidia's response

faced with these challenges, nvidia is not sitting still. ceo huang renxun released several "big moves" in the earnings conference call:

technological innovation: huang renxun emphasized that the next generation of ai models will require "10 times, 20 times, 40 times" computing power. what does this mean? it means that demand for nvidia chips may continue to soar.

diversified layout: in addition to continuing to focus on data centers, nvidia is also actively expanding into areas such as gaming, professional visualization, automobiles, and robotics. this "multi-legged" strategy can undoubtedly diversify risks.

strengthen customer stickiness: nvidia is developing its own cloud computing product, dgx cloud, charging customers $37,000 per month to access its supercomputers. this is a smart move that can both increase revenue and strengthen customer dependence.

stock buybacks: the company announced that it would spend an additional $50 billion to buy back its own stock. this move will not only boost investor confidence but also increase earnings per share.

conclusion: how long can the ai ​​feast last?

nvidia is undoubtedly the brightest star in the current ai boom. but as wall street often says: "past performance is not an indicator of future returns."

whether nvidia can continue to lead in the ai ​​era depends on the following points:

continuous technological innovation capabilities

effectively respond to increasingly fierce market competition

successfully manage complex international relationships and regulatory environments

maintain strong financial performance and meet high market expectations

in general, nvidia's future is full of opportunities, but it also faces many challenges. as investors or technology enthusiasts, we need to keep a clear head and not be dazzled by short-term brilliant performance, nor be too pessimistic about future challenges.

after all, in the world of technology, the only constant is change itself. let us wait and see whether nvidia can continue to lead the ai ​​revolution!

refer to:

[1] https://finance.yahoo.com/video/why-nvidias-future-growth-becoming-233000101.html

[2] https://wallstreetcn.com/articles/3726074

[3] https://www.cnbc.com/2024/08/28/nvidias-earnings-report-shows-problem-of-being-priced-for-perfection.html

[4] https://www.nytimes.com/2024/08/28/technology/nvidia-earnings-ai-stocks.html