Wall Street Lunch: Nvidia Beats, But No Cigar
Contributor since 2023 / 1804 Followers
Summary:
- Nvidia reported strong fiscal Q2 results, with revenue up 122% YoY to $30 billion, beating analyst expectations.
- Nvidia’s Q3 revenue guidance of $32.5 billion also surpassed forecasts, and the company announced a $50 billion share buyback program.
- Super Micro Computer’s stock plunged due to a delayed 10-K filing and concerns over internal controls, exacerbated by a Hindenburg short position.
BING-JHEN HONG
Listen below or on the go on Apple Podcasts and Spotify
Nvidia cruises past earnings forecasts, but the stock is under pressure. (0:18) Super Micro Computer plunges after delaying 10-K filing. (1:58)
The following is an abridged transcript:
The eagle has landed.
Nvidia (NASDAQ:NVDA) reported fiscal second-quarter results and guidance that topped expectations.
The AI chip darling said it earned $0.68 per share on an adjusted basis as revenue grew 122% year-over-year to come in at $30 billion. Analysts were expecting the company to earn $0.64 per share on $28.73 billion in revenue.
Looking to the third quarter of fiscal 2025, Nvidia expects to generate $32.5 billion in revenue, plus or minus 2%. Analysts were forecasting $31.71 billion.
Data center revenue flew past expectations, coming in at $26.3 billion, compared to estimates of $25.08 billion. Automotive revenue for the period clocked in at $346 million, while professional visualization revenue rose 20% year-over-year to $454M. Adjusted gross margin came in at 75.7% for the quarter.
CEO Jensen Huang said: “Hopper demand remains strong, and the anticipation for Blackwell is incredible,” adding that Blackwell samples are shipping to partners after some concerns over delays.
Nvidia also announced a $50 billion share buyback program. At the end of the quarter, Nvidia had $7.5 billion left on its previous share repurchase authorization.
But there’s a catch. The stock is down after hours.
Why the drop? Well, there’s beating estimates and there’s beating the hell out of estimates. Nvidia has been doing that regularly as its stock has been on a flight to Pluto. But this is the smallest beat in about a year-and-a-half.
The stock is currently down about 6% at the time of recording.
Sticking in the AI arena, Super Micro Computer (SMCI) plunged today after the server company said it would not be able to file its annual 10-K report on time.
“SMCI is unable to file its Annual Report within the prescribed time period without unreasonable effort or expense,” the company said in the filing. “Additional time is needed for SMCI’s management to complete its assessment of the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024.”
Super Micro added that it has not changed its results for the fiscal year and quarter ended June 30, which were announced earlier this month.
Wells Fargo weighted in, saying: “Given this uncertainty/concern over revenue recognition, and SMCI’s history, we’re cutting our PT to $375 from $650; now reflecting a 9-10x P/E on our C2025 EPS est.”
The delay comes one day after Hindenburg Research announced it had a short position in the company, citing concerns related to several matters, including accounting manipulation.
Seeking Alpha’s Alpha Picks, which has Super Micro in its portfolio, said: “While the lack of transparency surrounding SMCI’s [10-K] delay has created investor unease, the recent Hindenburg short report allegations nearly mirror those presented by Spruce Point Management’s short report in 2023, which could be spooking investors. SMCI maintains strong fundamentals and incredible growth.”
“Several analysts remain optimistic about Super Micro Computer, which has had eight upward revisions over the last 90 days versus seven downward,” Alpha Picks added.