Wow, a whole book’s worth of information in one chart. Let’s see, which would I choose … the 56% net margin or the 2% ? Another reason I’m sticking with and remain very optimistic on NVDA, the 5% drop today is more related to macro issues.
Interesting comment. Traditionally they've spent more as a percentage of revenue that their peers, so this Q may be an anomaly. But every engineer's, software and hardware, salary goes into R&D, as well as capital outlays for chip builds, development, bring up and so forth. Likely a good bunch of the cost of the data centers they build for internal use goes into R&D as well.
My bottom line is they are spending appropriately to support their exponential growth.
Not really. GAAP income is being blown out by their amortization of acquisition related intangibles. Which is primarily due to their xilinx acquisition. That's just a paper expense for tax purposes, it lowers taxable income, but its not representative of their real income.
If you want a more realistic comparison, add back in the amortization, which was 622M for that quarter to the gaap income. So 745M instead of 123M, = ~14% instead of 2%. Which sure, looks no where near as good as nvidia, but its not the joke of 2% that it appears to be using gaap.
GAAP accounting is going to misrepresent amds income by about 2B/year for the next many years, tho it becomes a smaller amount as time goes on. Right now its more then 2B/year.
Or do the comparison with non-gaap for both. But if you use non gaap then you are ignoring the stock based compensation expense, which is a real expense.
the amortization on AMD is only going to be there for a few short years, the R&D difference as percentages of income is a good thing for AMD too. NVIDIA needs to step this up. the rest of it is pretty telling on who backed the right horse when it comes to computing in todays world.
I’m not sure amd is the closest peer. Maybe Intel or Broadcom. But I’d actually say Nvidia has no peer!
Nvidia is investment grade. Amd is speculative- but you can make a lot of money on speculation!
Intel guides to 500m of Gaudi sales this year. Amd upped its guide by 500m to 4B of Mi300x sales for the whole year of 2024. And ironically, Nvidia guided up by 4B a year ago - up for 1 quarter - the very next quarter. And my guess is they will end this year with about 90b in sales.
This is Nvidia’s game. Competition is not an issue. There is no one. The only issue is does AI start delivering the value to justify this kind of sustained investment. I’d love to see examples and this discussion here.
Almost all of AMD’s price action for the last 6 months has been based on the narrative that they’re a viable alternative to NVDA.
There have literally been countless articles saying “Missed NVDA? Buy this cheaper AI stock now!”
The downside is Nvidia market cap is already priced in and heavily full at $2.1 trillion, which makes it feel like there isn’t much wiggle room now for new buyers to get in to since it now requires significant money to move the nvidia stock prices now which is why this subreddit isn’t as active as the AMD stock subreddit
The way I see it: It would have to go significantly higher for people who buy today or recently. For those that bought Nvidia today/recently and want to double their money, Nvidia market cap has to go from $2 trillion to $4 trillion.
I can see why it would scare off new investors from Nvidia when they can invest in smaller market cap company to double their money in a shorter time span while requiring smaller jump in market cap than trillions of dollars that is required.
If doubling your money is your requirement for buying a stock then I would say you're in the wrong place. Let us know where you're investing so we can all follow you to get a sure thing 2x, would ya?
Kidding aside, this stock is going to be a lot larger than it is now. There was a time I was wishing for a $100B market cap, then $500B, then $1T was the new dream. $4T is certainly possible, likley a lot more than that in time. Seriously
This company is going to be everywhere AI is in the next 10 years, robots, medicine, material science, entertainment, everything. They are executing, driving technology forward and have no peers, zero.
The thing that kills me about reddit is folks have no patience. Entertain me or downvote, be funny or downvote, make me money or downvote. You don't get rich in a week or by asking about sure things. The one advantage investors have on their side is time. You may not think it's gonna double from here. I do. I've owned this stock more than 15 years and never felt more confident about their future than I do right now. But like yours, mine is just an opinion.
Patience. I filed taxes after selling some shares of NVDA. Cost basis was $800, profit was $32,000 🤣 and I have 10x that still in my portfolio. This things is a golden goose. It moved up my retirement by 20 years.
If it hits 4T then people who bought at today’s price will just double their money, but hitting 4T is going to take years, so people would rather invest elsewhere that can double their money within a shorter time span.
The data center narrative cracked this earnings season. It’s not a data center story. It’s an Nvidia story. I will gradually reduce my data center holdings, probably after Q4. Gives me lots of time to be proven wrong.
Wow, a whole book’s worth of information in one chart. Let’s see, which would I choose … the 56% net margin or the 2% ? Another reason I’m sticking with and remain very optimistic on NVDA, the 5% drop today is more related to macro issues.
bc of powell
Amazing seeing this side by side!
NVDA could spend more on R&D
Interesting comment. Traditionally they've spent more as a percentage of revenue that their peers, so this Q may be an anomaly. But every engineer's, software and hardware, salary goes into R&D, as well as capital outlays for chip builds, development, bring up and so forth. Likely a good bunch of the cost of the data centers they build for internal use goes into R&D as well. My bottom line is they are spending appropriately to support their exponential growth.
easy to say if you have no idea how everything works.
2% margins... Whaaat?
Not really. GAAP income is being blown out by their amortization of acquisition related intangibles. Which is primarily due to their xilinx acquisition. That's just a paper expense for tax purposes, it lowers taxable income, but its not representative of their real income. If you want a more realistic comparison, add back in the amortization, which was 622M for that quarter to the gaap income. So 745M instead of 123M, = ~14% instead of 2%. Which sure, looks no where near as good as nvidia, but its not the joke of 2% that it appears to be using gaap. GAAP accounting is going to misrepresent amds income by about 2B/year for the next many years, tho it becomes a smaller amount as time goes on. Right now its more then 2B/year. Or do the comparison with non-gaap for both. But if you use non gaap then you are ignoring the stock based compensation expense, which is a real expense.
I know all that... But it was really fun for me to say, "2% margins"...
Worse than making gas cars
Those AMD numbers should be non GAAP to tell the proper story.
the amortization on AMD is only going to be there for a few short years, the R&D difference as percentages of income is a good thing for AMD too. NVIDIA needs to step this up. the rest of it is pretty telling on who backed the right horse when it comes to computing in todays world.
I’m not sure amd is the closest peer. Maybe Intel or Broadcom. But I’d actually say Nvidia has no peer! Nvidia is investment grade. Amd is speculative- but you can make a lot of money on speculation!
Intel is barely peer of AMD
I was speaking product portfolio / relative competitive positioning. Agree with peers comment.
Intel guides to 500m of Gaudi sales this year. Amd upped its guide by 500m to 4B of Mi300x sales for the whole year of 2024. And ironically, Nvidia guided up by 4B a year ago - up for 1 quarter - the very next quarter. And my guess is they will end this year with about 90b in sales. This is Nvidia’s game. Competition is not an issue. There is no one. The only issue is does AI start delivering the value to justify this kind of sustained investment. I’d love to see examples and this discussion here.
Yeah, MSFT, Meta, Google, Amazon are all just as much peers as AMD and Intel
Almost all of AMD’s price action for the last 6 months has been based on the narrative that they’re a viable alternative to NVDA. There have literally been countless articles saying “Missed NVDA? Buy this cheaper AI stock now!”
That is a great comparison
Omg 😳 BRUTAL
12+B of net profit is bananas
The downside is Nvidia market cap is already priced in and heavily full at $2.1 trillion, which makes it feel like there isn’t much wiggle room now for new buyers to get in to since it now requires significant money to move the nvidia stock prices now which is why this subreddit isn’t as active as the AMD stock subreddit
Nvidia sales will likely reach $200B by 27. Nothing is priced in
What do you estimate the market cap will be at $200B by 27?
higher
HIGHER, THE KING OF THE SKY
Eh
My guess is no more valid than anyone else's. You have the power to create your own guess.
The way I see it: It would have to go significantly higher for people who buy today or recently. For those that bought Nvidia today/recently and want to double their money, Nvidia market cap has to go from $2 trillion to $4 trillion. I can see why it would scare off new investors from Nvidia when they can invest in smaller market cap company to double their money in a shorter time span while requiring smaller jump in market cap than trillions of dollars that is required.
If doubling your money is your requirement for buying a stock then I would say you're in the wrong place. Let us know where you're investing so we can all follow you to get a sure thing 2x, would ya? Kidding aside, this stock is going to be a lot larger than it is now. There was a time I was wishing for a $100B market cap, then $500B, then $1T was the new dream. $4T is certainly possible, likley a lot more than that in time. Seriously This company is going to be everywhere AI is in the next 10 years, robots, medicine, material science, entertainment, everything. They are executing, driving technology forward and have no peers, zero. The thing that kills me about reddit is folks have no patience. Entertain me or downvote, be funny or downvote, make me money or downvote. You don't get rich in a week or by asking about sure things. The one advantage investors have on their side is time. You may not think it's gonna double from here. I do. I've owned this stock more than 15 years and never felt more confident about their future than I do right now. But like yours, mine is just an opinion.
Patience. I filed taxes after selling some shares of NVDA. Cost basis was $800, profit was $32,000 🤣 and I have 10x that still in my portfolio. This things is a golden goose. It moved up my retirement by 20 years.
we will have a 4T company one day because of inflation
If it hits 4T then people who bought at today’s price will just double their money, but hitting 4T is going to take years, so people would rather invest elsewhere that can double their money within a shorter time span.
yea, makes sense
The data center narrative cracked this earnings season. It’s not a data center story. It’s an Nvidia story. I will gradually reduce my data center holdings, probably after Q4. Gives me lots of time to be proven wrong.
what are your data center holdings?
Wait.. What is the x-axis? And... where is the crypto mining? Is it under gaming?
I would imagine it is combined with data centers and gaming depending on the miners setup.
Nvidia is absolutely scamming with those prices. No surprise it’s been this way since the 10 series. Without competition this is what happens
It’s not a scam if customers are willing to pay, in advance, just so they can get your product.
You have alternatives if you dont like the price.