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Analyst POV

All Eyes on nVidia

NVIDIA’s upcoming earnings report on August 28th is expected to bring heightened volatility, driven by strong AI-related spending from major tech companies like Amazon, Google, Meta, and Microsoft, alongside potential delays in the launch of its next-gen Blackwell platform. While cloud providers continue to increase capital expenditures for AI, early signs of AI monetization are emerging from companies like ServiceNow and Palantir. Despite concerns over the Blackwell delay and potential guidance risks, NVIDIA’s long-term position remains robust, making any stock dips likely short-lived.

When nVidia reports on August 28th, expect heightened volatility as options implied volatility sits at 15% versus a 10%two-year average. Two divergent themes are at play: (1) Continued strongAI-fueled capex led by the technology titans Amazon, Google, Meta and Microsoft juxtaposed against (2) a delayed next-generation product Blackwell. With the stock up 20% since they reported their

 

nVidia CEO Jensen Huang first unveiled the Blackwell platform at GTC in mid-March, stating the platform has 4x better training performance and 30x better inference than the current Hooper line. The platform was expected to ship later this year with material contribution in theirJanuary quarter.  The Information reported early this month that the  Blackwell platform was experiencing design flaws and, as a result, will be delayed by at least three months.

 

Cloud Service Provider Spend Remains Strong

The Cloud Service Providers continued their aggressive stance toward AI investments this quarter, highlighted below.

 

·     Microsoft increased its capital expenditures on a sequential basis to meet demand and noted that capex will increase in 2025vs. 2024.

·     Meta increased their 2024 capex guidance from$35-40 billion to $37-40 billion.

·     AWS expects capex to be higher in 2H of this year vs. 1H.

·     Google expects to spend $12 billion+ per quarter through the end of 2024.

 

Early signs of Gen AI Monetization

The biggest pushback on the massive AI infrastructure spending, nVidia being the biggest beneficiary, is that few companies are able to monetize their investment. This past quarter, two companies in particular ServiceNow and Palantir showed a nice acceleration in current and future growth attributed to their AI investment, see below taken from Daloopa’s data sheets.

ServiceNow

Palantir

Net Net on NVDA Quarter

With the stock up 20% since the last quarter and theaforementioned Blackwell issues, risk seems skewed to the downside based onpossible October quarter guidance. However, NVDA’s long-term position seemsfirmly entrenched; thus, weakness in the stock will likely be short-lived.

To download the latest nVidia data sheet, click here.

To download the latest ServiceNow data sheet, click here.

To download the latest Palantir data sheet, click here.

To watch our analyst interpret this data live, click here.

.

Analyst POV

All Eyes on nVidia

NVIDIA’s upcoming earnings report on August 28th is expected to bring heightened volatility, driven by strong AI-related spending from major tech companies like Amazon, Google, Meta, and Microsoft, alongside potential delays in the launch of its next-gen Blackwell platform. While cloud providers continue to increase capital expenditures for AI, early signs of AI monetization are emerging from companies like ServiceNow and Palantir. Despite concerns over the Blackwell delay and potential guidance risks, NVIDIA’s long-term position remains robust, making any stock dips likely short-lived.

Josh Burwick
August 27, 2024

When nVidia reports on August 28th, expect heightened volatility as options implied volatility sits at 15% versus a 10%two-year average. Two divergent themes are at play: (1) Continued strongAI-fueled capex led by the technology titans Amazon, Google, Meta and Microsoft juxtaposed against (2) a delayed next-generation product Blackwell. With the stock up 20% since they reported their

 

nVidia CEO Jensen Huang first unveiled the Blackwell platform at GTC in mid-March, stating the platform has 4x better training performance and 30x better inference than the current Hooper line. The platform was expected to ship later this year with material contribution in theirJanuary quarter.  The Information reported early this month that the  Blackwell platform was experiencing design flaws and, as a result, will be delayed by at least three months.

 

Cloud Service Provider Spend Remains Strong

The Cloud Service Providers continued their aggressive stance toward AI investments this quarter, highlighted below.

 

·     Microsoft increased its capital expenditures on a sequential basis to meet demand and noted that capex will increase in 2025vs. 2024.

·     Meta increased their 2024 capex guidance from$35-40 billion to $37-40 billion.

·     AWS expects capex to be higher in 2H of this year vs. 1H.

·     Google expects to spend $12 billion+ per quarter through the end of 2024.

 

Early signs of Gen AI Monetization

The biggest pushback on the massive AI infrastructure spending, nVidia being the biggest beneficiary, is that few companies are able to monetize their investment. This past quarter, two companies in particular ServiceNow and Palantir showed a nice acceleration in current and future growth attributed to their AI investment, see below taken from Daloopa’s data sheets.

ServiceNow

Palantir

Net Net on NVDA Quarter

With the stock up 20% since the last quarter and theaforementioned Blackwell issues, risk seems skewed to the downside based onpossible October quarter guidance. However, NVDA’s long-term position seemsfirmly entrenched; thus, weakness in the stock will likely be short-lived.

To download the latest nVidia data sheet, click here.

To download the latest ServiceNow data sheet, click here.

To download the latest Palantir data sheet, click here.

To watch our analyst interpret this data live, click here.

.

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