Finally, the cat is out of the bag as the most awaited earnings from Nvidia have been released. It scored another set of stellar results, with revenue jumping 265% year-over-year (yoy) and earnings up by 769% yoy!
It is undoubtedly the fastest-growing member of the Magnificent 7. The next highest revenue growth was Meta at 25%. This vast difference in growth justifies, at least in part, the stock’s run over the past year.
Of course, it’s not entirely fair to compare revenues alone because Amazon, as a retailer, tends to report higher figures since it accounts for Gross Merchandise Values (GMVs) as part of its revenue, but its profits tend to be much lower.
Comparing profit margins, Nvidia leads the pack with 56%, much higher than the rest of the Magnificent 7:
Fastest-growing stock with the fattest profit margin, plus a compelling story of dominating the supply of GPUs for the hottest trend in AI, Nvidia really has its stars aligned.
Nvidia’s share price has gained 227% from a year ago. In recent weeks, Nvidia actually surpassed Alphabet and Amazon to become the third-largest stock among the Magnificent 7 before declining back to its fifth position again.
However, Nvidia’s share price jumped 8.9% during after-market hours and will be able to retake the third position should the stock trade at a $1.814 trillion market cap later, while Alphabet and Amazon’s share prices gain less.
Though Nvidia deserves its stellar stock performance, increasingly, there are concerns that Nvidia’s growth may not be able to meet the lofty expectations eventually.
Nvidia CEO Jensen Huang said in a conference call with analysts that “fundamentally, the conditions are excellent for continued growth,” implying that he is confident the growth can sustain through 2025 and beyond.
The guidance for the next quarter is revenue of $24 billion. This would represent a 234% yoy growth, with no sign of slowing.
However, this doesn’t mean one should chase the stock if they haven’t got the stock already. Nvidia has to maintain expectations to keep the share price up, and the problem with that is a slight disappointment can significantly pull down the share price. I don’t want to find myself at the mercy of such circumstances.
