Nvidia Announces Financial Results for Second Quarter Fiscal 2025
nvidianews.nvidia.com
nvidianews.nvidia.com
Think of the dev ecosystem effects in all the various permutations, e.g. from Windows or Apple to AWS to more granular like PyTorch.
Those advantages aren't easily eliminated just by more competitors or even 'better' competitors.
But holicistally, if you were to buy the entire Nvidia company today, even if those advantages continue untouched for the next 10 years, and competition doesn't catch up, and the AI boom continues ... you're still not getting your money back. That's how high the valuation is.
Nvidia's fief has a lot of folks in it, who've built sloppy stuff all over the place because they can. Most of that won't get replaced.
But the modern tooling like PyTorch and its underlying JAX doesn't need or care about this legacy. The future can build far more intimately & with deliberation to folks who haven't such large swamps around their ecosystems. We can tune systems more efficiently & carefully when our vendors don't keep us so so far away from the core hardware. Nvidia has to keep maintaining this huge footprint of software, keep it going themselves, supporting a vast legacy, while everyone else gets to innovate forward, with much better access to the hardware.
When I hit an input box on my phone, a keyboard pops up on the screen, with the first row saying QWERTYUIOP, just like the Sholes and Glidden typewriter of 1878. I'm waiting for innovation on this first, then I'll look for innovation beyond CUDA.
That random order of letters from 1878 still appearing on my screen is the definition of legacy.
PyTorch supports both ROCm and Ibex, but it's support is spotty and incomplete to the point where it becomes a pain to use despite AMD spending billions on improving its software layer.
NVIDIA is reaping a decade of design decisions on CUDA compatibility made less sloppily than its competitors.
People totally underestimate that and still think of Nvidia as a Semi company which only makes chips lol.
They literally guided more growth for the next quarter and Nvidia is notorious for sandbagging this number.
Not achieving those results does not imply that results are going downhill from now, as you suggest.
Slowing growth and cooling margins are reasonable explanations for the stock being down even in light of continued growth.
If the market believed that demand had indeed peaked this quarter as you suggest, the stock would absolutely crater.
But nobody reasonable believes that. All the data from outside Nvidia (eg: Capex from hyperscalers) also points to continued growth.
Besides Apple, who can't be forced to build server hardware at gunpoint, Nvidia is the only TSMC customer bringing HPC to the consumer. That's an enormous segment they can capitalize on, and AI is really just the tip of the iceberg. With so many other OEMs laser-focused on AI performance, they're entirely glossing over the flexibility that made CUDA successful in the first place. Pour another one out for OpenCL, the industry hardly knew ye.
TSMC doesn’t sell chips directly, they just manufacture designs
It's just that the rate of growth is slowing and when nvda is at a 45 P/E, you need high growth to justify its market cap.
So market likely sees decelerating growth which can't justify such a high P/E. e.g. if growth fell to say 30% YOY in a year, nvda would be seen as overvalued today.
That's a PEG ratio of 1.5 [1], below the S&P 500's forward 2.63 [2]. (EDIT: It's 1.4x [3].)
Wild times.
[1] https://www.investopedia.com/terms/p/pegratio.asp
[2] https://www.nasdaq.com/market-activity/stocks/spgi/price-ear...
I'm seeing 17% projected growth in earnings: https://ycharts.com/indicators/sp_500_earnings_per_share_ttm...
P/e is 24. ($493 billion quarterly earnings, $47 trillion market cap). - and yes, nvda is literally alone 6% of sp500 earnings.
Peg is 1.4 as a comparable to the way I calculated Nvidia.
Yes. Yes it is.
Earnings beat is almost always Mainstream, Newbie, Normie focus.
Quarterly Earnings can be (legally) cooked to tell whatever numbers you want. Revenue Growth and Operating Margins always tell the bigger story
More volatility to be expected during the call if/when they finally address the rumors of Blackwell delays.
It could be due to gross margins, though they're pretty much in line with estimates [1]. I'd guess it's noise from options rebalancing [2].
[1] https://www.reuters.com/technology/nvidia-forecasts-third-qu...
[2] https://www.reuters.com/technology/nvidia-results-could-spur...
Probably not unless there is a lot of retail on one side of the 0D options book. Also, it would be a reverse squeeze, not short ladder, which is largely a mythical beast invented to salve day traders.
Now it is the company with the second largest market cap in the world and enormous growth, so analysts are watching it more and talking about it more. Results are more baked in.
Also, it was announced the next-gen Blackwell chips had a flaw found late in the design and will probably be delayed three months, which will also affect revenues.
Looks like things are slowing down (second derivative)
Important question: is it demand or manufacturing capability?
It was a stratospheric comeback but people who expected a linear trajectory from that are missing the context
Nvidia is totally supply constraint as it can easily be seen. They also underguide every quarter for 2 years and beating it. But if you look closely then you can easily see the $4b QoQ growth. That is the constant there since 2022.
Blackwell will add additional supply next year. I don't think Hopper wills top shipping and I don't think demand will fall. So next year QoQ absolute growth could go up which will probably surprise to the upside.
If Nvidia can utilize $4500 for very 2nd GPU they ship in then next 10 years then in 10 years Nvidia will make more revenue annually with SW only than today total. And that is just the beginning and shows the power of a platform.
Do you think Apple dominates because of the great iPhone HW or iOS? Think about that and you'll understand why Nvidia will continue to grow and surprise.
The reason you’re confused is you are thinking of the peers of NVIDIA as being AMD and Intel and not Apple and Nintendo and Sony, or mainframe vendors, etc. The reason they are different from AMD or Intel (or I think we can throw Xbox into this pile too too) uses AMD or intel because they want to use AMD or intel, they use them because they are a convenient compile target for code that you’ve gone to the effort of making very portable. And that’s a commodity market, where the other things are platforms with an organic userbase that’s not just there because it’s the cheapest thing.
(this is true of gaming gpus too btw, other than AMD APUs being very compelling for handheld and laptop gaming, and maybe Lunar Lake. whereas people want to use nvidia - that’s the actual meaning of “mindshare” and not the “mind control field” AMD fans assume mindshare to be. People who use the product for the product’s sake and not just pure cost expediency.)
The other thing I think people are sleeping on is the mediatek partnerships. They already announced three different markets (some are already launched) - automotive, smartphone SOCs, now monitor controllers too. They will almost certainly be the vessel for Nvidia’s desktop chip next year too - functionally they are partnered with /oem for nvidia now. Nvidia already has PNY to be their Foxconn/Sapphire, now they have Mediatek to do the boring plumbing work in their designs. Nvidia simply doesn’t have the staffing to tap these markets and staffing up with a bunch of boring suit and tie workers would destroy what makes nvidia tick, now they can go tap these other markets.
I think people really really overstated Nvidia’s unwillingness to license their IP etc. Buying ARM was a play for getting GeForce as the default graphics IP for basic smartphones and shit, and giving CUDA access to that market. Well, getting your IP into mediatek is the next best thing. Thinking Jensen wanted to buy arm to sell more tegras is pleb tier thinking and ambition. Nvidia didn’t pony up $40 billion to burn it all down. That’s fucking stupid.
There’s obviously a point where it gets stupid, but nvidia is genuinely still a company with a huge amount of growth potential and thinking they can sustainably lock in most of their current earnings isn’t too crazy. The real counterweight is that it’s a one man show and Jensen is getting old. But it seems like maybe Catanzaro is being positioned as a potential heir, what with him being the public face of dlss as well as the AI effort as a whole there. He seems like a logical choice of heir.
It doesn’t mean much beyond their accounting processes.
Most people reading this will indeed have zero investment in Nvidia.
"One of many"... Nasdaq & Nyse have capitalization equivalent to pretty much the rest of the world.
Most people reading this, if they have any money in any stock exchange, they are directly or indirectly exposed to Nvidia, whether they like it or not.
If you're talking about the indirect impact of foreign stock markets on a local markets... Sure, I guess. But that's hardly in the spirit here. Any large company in many countries has an impact on markets local markets when they sway, but rarely in any significant way.
The majority of people on HN are not impacted in any meaningful way by Nvidia's stock price and have no direct (brokerage, retirement fund, etc) investment in them.
The assessments in further up comments that give context here are that we all either invest in Nvida unknowingly or have our employment/compensation tied to them. I highly doubt this is true for the majority of HN users.
Unless I'm missing something, most of HN audience is working in a tech related field, isn't it ?
this isn’t to say a down quarter that’s 25% down or whatever would be fatal. Obviously it’s going to have to correct a little at some point etc. Or if everyone else is obviously doing fine and it’s some nvidia-specific thing. But if Jensen got on the phone and said they were down 75% in next quarter orders on the basis of secular market trends and expected further cancellations, the tech market as a whole would probably crumple.
Most of the gpus nvidia sells aren’t DGX, they’re going into dell or HP or supermicro servers. Even the ones that aren’t officially partnered benefit from this ecosystem momentum etc. AI buildout has sold a lot of computers, a lot of memory, a lot of racks and networking and optics and electrical, etc.
As what is still functionally the only company making money on gpgpu sales right now, and with them functionally being near-100% datacenter and related (automotive etc) they are a massive leading signal on where the market is headed. The next best one is like… powercolor (TUL Corp).
(and nvidia conveniently does break it out anyway, but a lot of companies like AMD tend to submerge it in another group to deliberately make the revenue difficult to break out.)
The entire Tech sector was propped up Nvidia and GenAI since Nov 2022.
The bloodbath that would have ensued in the Tech sector (depressing salary and accelerating layoffs) would have been unfathomable.
If you think the $4 Trillion created in the Tech sector since Nov 2022 didn't affect non-AI people positively, you are naive about how the economy works
It's been shown multiple times[0][1] that the majority of HN users are not American, certainly not 100% (as you assessed further up). It would also be reasonable to assume that not all American HN users work in a graphics card relevant space, or even tech.