Nvidia Q2 FY25 Preview: Top Clients' Capex Spend Expectations Signal Caution (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Nvidia Corporation will probably post a result beat in revenues and margins, simply because it has a phenomenal track record of doing so over the past 78 quarters.
• Instead, I expect the market's focus to be on the revenue guidance beat/miss. The market's expectations are sky-high here, as other semi stocks have been punished for in-line guidance.
• Downward revisions in Nvidia's top clients' capex spend expectations lead me to have low expectations for Nvidia's revenue guidance, and a cautious stance for a potential post-earnings stock dip.
• I still think a 43x 1-yr fwd P/E is not excessive for Nvidia, given its rapid growth at high margins.
• Technically, vs. the S&P 500, there are very few reasons to be bearish on Nvidia.

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