My Prediction Did Not Come True

I believed Nvidia (NVDA) would beat estimates by a lot when it reported earnings back on August 28th. It did beat estimates, but not by a lot. As a result the stock price has fallen. As I write this the stock closed at $119.24 in after hours trading on August 30th.

I’m Still Bullish

Nvidia’s second-quarter earnings were really solid. With a heavy focus on AI, investors have zeroed in on sales numbers for its Blackwell and Hopper graphics processing units (GPUs), while ignoring other key parts of the business.

As reported in Barron’s, here are three things that may have been missed in its earnings report that are worth considering before the markets reopen Tuesday after the Labor Day holiday.

Gaming

For the second quarter, its gaming revenue climbed 16% from a year ago to $2.9 billion.

Networking

Networking revenue climbed 16% from the March quarter, indicating strong Ethernet for AI sales growth. On a call with analysts Nvidia CFO Colette Kress said the company expects its Spectrum-X networking platform to become “a multibillion-dollar product line within a year.”

Self-Driving Cars

Revenue for the automotive division climbed 37% from a year ago to $346 million.

Now that most of the “hype” is priced out of the stock, I believe the focus will shift to the company’s fundamentals, which are rock solid.

What do you think?

Happy trading!