Its highest value jumped 46 percent year-on-year to $ 8.28 billion, compared to an average outlook of $ 8.08 billion.įor the second quarter, however, the chipmaker predicted its high of $ 8.1 billion, “plus or minus 2%.” Analysts on average expected Nvidia’s sales to reach $ 8.44 billion in the second quarter. Nvidia has reported a customized Q1 earnings per share $ 1.36, compared to analysts’ average estimates of $ 1.29. The chipmaker noted that the war in Ukraine and congestion in China would significantly reduce its revenues in the second quarter. Wait until a better entry point, then make your move.Īs of this writing, Thomas Niel did not hold a position in any of the aforementioned securities.Nvidia (NASDAQ: NVDA) the shares fell in pre-market trading after the company reported stronger-than-expected results in the first quarter, but provided guidance on second-quarter revenue below estimates. But it could also be a warning sign to avoid the stock further. More bad news could hit the price and present a stronger buying opportunity. While the company’s valuation is below arch rival AMD, Nvidia stock continues to trade at a fairly high valuation. Investors have beaten down NVDA stock but they’re not yet at bargain levels. If NVDA continues to disappoint, shares could trade closer to the valuations of the broad line chip makers. I believe NVDA stock could go materially lower. As he wrote in his client note, “We remain somewhat cautious into the print nonetheless, and believe better entry points may exist at later dates.” Rasgon recently gave the stock a “market perform” rating, believing the shares’ current valuation minimized potential upside. NVDA may be a strong opportunity down the road, but not at the current price.īernstein analyst Stacy Rasgon agrees. With the company’s growth troubles, it is tough to justify the stock’s current premium to the broad line chip names. Another broad line chip maker, Broadcom (NASDAQ: AVGO), trades at a forward P/E of 50.3, but at a lower EV/EBITDA ratio (14.2) than Nvidia. NVDA trades at premium to broad line chip makers such as Intel (NASDAQ: INTC), which currently trades at a forward P/E of 11.5 and has an EV/EBITDA ratio of 7. While NVDA trades at a lower valuation than AMD, I continue to believe that Nvidia stock is not cheap. In terms of enterprise value/EBITDA (EV/EBITDA), NVDA trades at an EV/EBITDA ratio of 28.4, compared to AMD’s EV/EBITDA ratio of 69.7. NVDA currently trades at a forward price/earnings (forward P/E) ratio of 38, compared to AMD’s 69.5 forward P/E. Nvidia stock continues to trade at a discount to AMD shares. With this in mind, let’s take a look at Nvidia stock’s current valuation. But this does not necessarily mean NVDA is undervalued. Much of this risk could already be factored into the Nvidia stock price. But if the company can beat expectations and provide an improved forecast, investors could see a boost in the Nvidia stock price. The analyst community also believes that the data center business has yet to turnaround. Last quarter, the company projected continued weak sales for the data center segment. Nvidia’s other businesses face headwinds as well. Widespread availability of 5G is required before cloud gaming reaches critical mass. But cloud gaming remains a work in progress. The subscription-based service could be a cash cow for Nvidia. The service is currently in beta, but a million-plus players have signed up for the wait list.
#Nvda earnings disappoint Pc
Nvidia’s GeForce NOW enables PC gamers to stream more than 500 games from anywhere, using Nvidia’s GPUs remotely. But what future catalysts will be a shot in the arm for the Nvidia stock price? Perhaps cloud gaming is the ticket to future growth. This price war underscores Nvidia’s troubles in the gaming space. After pushing Nvidia to cut prices, AMD caught them off guard again - with another price reduction. AMD may have gotten the better of Nvidia on price. But price has been the primary factor in the war. Part of the battle is based on performance. Last month, Nvidia launched the RTX line to compete with AMD’s family of Navi GPUs.īoth chip makers are competing for dominance of the gaming market. But the biggest factor is the GPU war with AMD. Among them are the U.S.-China trade war and the global chip glut. With NVDA stock, several factors come into play. Here’s why I recommend some patience before making a move. With shares continuing to trade at a premium to broad line chip makers, now may not be the best time to buy into this one. But high expectations continue to be priced into Nvidia stock. NVDA stock trades at a discount to competitor Advanced Micro Devices (NASDAQ: AMD). Not so fast! While the company has positive growth catalysts in the pipeline, the shares could be overvalued. So, with earnings due out today, is it time to buy NVDA stock?