😴 Was up till 1am last night breaking down Nvidia ($NVDA) earnings for you all in the Weekly Buzz and just realized the image I chose probably isn't appropriate anymore given the 5% drop this morning 🤣 But in any case, here's my earnings breakdown! 🔥 The headline is Nvidia posted pretty incredible results - $68B in revenue, 73% up from last year. To put this number into perspective, Nvidia had 9 quarters of declining growth rate and the last 2 quarters has turned this around going from 56% -> 63% -> 73% growth. To have accelerating growth is pretty wild, but is largely due to the crazy spending increases across the 'Hyperscalers' which is also why I think the stock dropped this morning. 😰 We saw with Microsoft, Amazon, and Google's earnings that investors are getting increasingly spooked by the AI spending and want to start seeing a return, and this quarter Nvidia annouced that Hyperscalers are 50% of their revenue, so Nvidia's growth story is essentially just riding on this spending continuing. ⚠️ As I put it in the Buzz "Nvidia’s success is in direct correlation with the rising AI spending, and the many fears of how long the massive capex can continue to grow are very real." 💡 Even in periods of massive technological progress, infrastructure can get overbuilt. The internet has been no doubt transformational, but in the late 1990s dotcom bubble, companies invested over $1 trillion in fiber-optic infrastructure, much of which went unused. ⁉️ The big unknown is where we are in the AI buildout. Are we still in the beginning, or are we at the ‘overbuilding’ stage? That's still a big open question. Most analysts are super optimistic about Nvidia and think we're still in the beginning, with an average price target of $267 (40% above the current price). Jensen Huang also beleives the other 50% of customers will be a big growth point, saying: “Agentic AI has reached an inflection point, and it literally happened in the last 2 or 3 months. After agentic AI, he added, there will be physical AI, as new AI models are integrated into robotics and manufacturing equipment." But whether you think Nvidia and AI are a bubble or a boom depends completely on your answer to 'what stage are we in' in the AI buildout! 🙋♂️ Anyway, that's my rapid thoughts - feel free to use this as a discussion post and see my full breakdown in the Weekly Buzz https://news.blossomsocial.com/p/nvidia-saves-the-market-again
