NVIDIA Investors Give Tepid Reaction to Upbeat Forecast
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| NVIDIA Investors Give Tepid Reaction to Upbeat Forecast |
NVIDIA Investors React to Bullish Forecast, Bloomberg Audio Studios, Podcasts, Radio, News. This is a breaking news update from Bloomberg. Quick reaction and analysis from our 3,000 journalists and analysts around the world. Let's get to the real deal. First quarter revenue forecast betting estimates.
Uh, the company is looking at revenue of $76.44 billion to $79.56 billion in the first quarter. That's easily above the Street estimate of $72.78 billion. Let's move back to the fourth quarter.
Data center revenue exceeded expectations at $62.3 billion, compared to the Street estimate of $60.36 billion. Uh, Nvidia is saying that computing demand is growing rapidly.
Fourth quarter adjusted gross margin of 75%. We got 75.2%. Oh, fourth-quarter revenue of $68.1 billion, better than the Street estimate of $65.91 billion.
Timwe is seeing this stock up about 2.2% in the aftermarket now. Yes, just to remind you where we stand with these numbers.
The first company saw first-quarter revenue of $76.44 billion to $79.56 billion. That beat estimates of $72.78 billion by hand. As Carol reported, Nvidia CEO Jensen Wong said in a statement that computing demand is growing rapidly.
Oh, we also repeated fourth-quarter data center revenue of $62.3 billion. That's above the $60.36 billion estimate and gross margin estimates of 75.2%. Our Sarah Fryer said on our live blog.
that shares are rising on that data center revenue beat. Hey Ed Lello, come in. I know you're looking at those numbers. What jumps out to you?
Yeah, I mean straight to the point, and that's what I would have done anyway. Go there. You know, revenue in the first quarter of the fiscal year is $78 billion plus or minus 2%.
Um, you know, the consensus was really high, but it's a very simple equation, like going into this um. There were a lot of names from the sell-side and the buy-side
That said, they wanted to see Nvidia overall have billions of dollars more revenue in the current period than you know against the consensus.
And so I will say one thing to confirm something is that the first quarter of the fiscal year, which is the April quarter, the outlook does not assume any calculated revenue from China.
There is no factor in any calculated revenue from China, that Iguess is something to check the list. That was one of the questions that we asked.
I want to bring in Jay Goldberg from Seaport Research Partners, senior analyst for semiconductors and electronics. He also joins us from San Francisco.
Jay, anything here that confirms your thesis or goes against your sell-off rating on Nvidia? Yeah, I mean it goes, I mean
That this is a good quarter. It's a good quarter and a good guidance. It's above my expectations, above consensus, but good for them.
Oh, we're still waiting to see a lot of detail. What do you want to see? I want to see and hear more about what the gross margin is for next quarter.
I think it'll be in the CFO commentary. Yeah. Oh, Ed, jump in. Do you have it? Yeah. No, I don't have it yet,
But it will be in the CFO commentary. But 75.2% versus 75% expectations. Imean, can you add, can you use that guide to how the company might look in the first quarter?
I mean, on a basis point basis. Yeah, Ilook margins are affected by several things like um. It's been a question on sales on previous calls,
The percentage of a server that Nvidia supports. And again, what's changed over this period is that Nvidia is starting to sell,
For example, CPUs are a standalone product. And that was part of the metadeal that was included. They talked about Coreweave being an early adopter of CPUs as a standalone product.
You know, how does that impact the margin profile going forward? Um, but yeah, I mean, what they do is they own more of the server.
And that's been one of the ways they've gotten margins where they are, and obviously, being 2% above where they were hoping to be is not a bad thing, you know. Yes, I'm looking at that.
CFOcommentary. Um, as we know, revenue is expected to be 78 billion plus or minus 2%. Oh, and as you correctly pointed out,
Don't assume data center compute revenue from China in their outlook, GAP, and non-GAAP. Gross margin is expected to be 74.9% and 75%, plus or minus 50 basis points, respectively.
Uh, that includes a 1% impact from stock-based compensation expense. Oh, just seeing what else we have here. Operating expenses, GAP, and non-GAAP operating expenses will be approximately 7.7 billion and 7.12 billion, respectively, including 1.9 billion of stock-based compensation expense.
One headline that caught my attention, uh, Nvidia says hyperscalers accounted for over 50% of 4Q data center revenue. Jay Goldberg, I want to repeat that headline for you.
Hyperscalers accounted for over 50% of 4Q data center revenue. Is this a sign that Nvidia is diversifying revenue? Who made up the rest of the data center revenue?
Is it automakers? Like, who is buying? Well, I think that's one of the most interesting things that's happening with Nvidia.
is that they're not just reshaping the semiconductor industry. They're also trying to reshape the cloud computing industry. And that's why we see
That all these NeoClouds are getting investment or support from Nvidia. NVIDIA will have 100 more Neocloud users than three Hyperscale users, of course.
And they're doing a great job of creating it, wanting to bring it to life. So those other customers, Ed, come here. Those other customers are like coreweaves and other NeoClouds.
Yeah. I mean, what's still important in that reality is that obviously the vast majority are going to be hyperscalers plus meta, right? Um, and so they want to switch between stories.
that they called an AI factory. First, an AI factory was an on-prem data center that enterprises would operate, and maybe some of the NeoClouds themselves. Now an AI factory is
What you would describe as any data center that has AI workloads running. So they've cut and changed that story. But the essence of it was
that they wanted to move beyond hyperscalers to having people own their own infrastructure for AI workloads, whether they're a software company or an enterprise of different sizes,
So you know. I'm looking at supply constraints, and I think they say in the CFO commentary that I'm looking at in terms of gaming. They say we expect
that supply constraints in the first quarter of fiscal 2027 and beyond will be a headwind for gaming. But um, it's not that significant, right, Ed? I mean,
We really want to see if that's an issue in the data center area. Unfortunately, you know, my history with Nvidia, you know, before I came to Silicon Valley and covered data center, was gaming
And, you know, now it's such a small part of revenue. I mean, Jay could jump in, but it's not really where anyone is looking right now.
Um, there's some discussion later on because it has to do with the balance sheet and cash flow, and what it has to do with supply, but you're right that what they're basically saying.
Is it that gaming was the segment that was impacted? And I don't know if that's really having any impact on how we view after-hours trading.
By the way, Nvidia shares are up 3.4% right now. And TSMC and Micron shares are following Nvidia higher. Jay Goldberg, come here and talk a little bit about the broader implications of this kind of print outside of Nvidia.
What does this signal send not just to hardware makers but to the whole? I think there are always concerns about how long that's going to last.
And we certainly had some positive data points about that when the hyperscalers reported two weeks ago, Facebook reported that their capex numbers were very strong.
It just continues that trend. Oh, and I don't want to say it's a rising tide that lifts all boats, but it's six $700 billion in capex this year.
And it's going to spread throughout the ecosystem. No, and I want to go back, and I totally love gaming, but I wanted to see if there were any supply constraints in the rest of their universe.
And I just thought it was kind of interesting that I didn't see anything along those lines. That was Justin in terms of gaming. So, is this a sign
That we haven't seen anything yet that the company has said in terms of supply constraints for the rest of the business, or I don't know if it's not that important. Well,
I know you know I leave it to the analysts to model the amount of money left on the table. The consensus, you know, Nvidia, it's an enviable position,
Right, where demand is outpacing your supply capacity anyway. But going back to that five-year handbag analogy from a moment ago, you know, the other argument that Gentleman and Nvidia have made quite consistently
is that if you tell your suppliers what you want to do 5 years in advance, the rest of the supply chain can help you prepare and keep up. And you know,
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