NVDA财报表现优异（营收增长106%），但受利润率及应收账款担忧影响，股价反应平淡；凭借高质量客户群和垂直整合，基本面依然强劲。

A lot of this is solely due to Nvidia last night. Really, really good earnings.

Go, Nvidia. Let's talk a little bit about Nvidia's earnings last night. 96.2 billion in revenue that was up 106% year-over-year. 89 billion was up 117 uh that's uh data center revenue. So revenue from data centers, 89 billion, that was up 117% year-over-year. Operating income was 63.7 billion, up 124% on a year-over-year basis. That was a 66.2% operating margin. That was up from 64% last quarter. Uh gross margin 75% 260 uh basis points year-over-year. Uh GAP Q3 guided to 74.9%. And EPS non-GAAP was $222 up 120% year-over-year.

Mike, really, no matter how you cut this these numbers, they were actually just pretty stellar across the board. They were beyond stellar. I mean, you know, when they came out and said 70% revenue revenue growth for this coming four quarters, that blew out estimates.

Um, and then then they came out and said that it could even be higher, but they just can't produce enough. Yeah. So, you know, they're basic basically telling you that they're doing everything they can. Their their their factories are running full-time, getting out what they can. The demand is insatiable.

There are a couple little things though worth noting, and I think that's why the market initially opened slightly lower. And look, it's only up 8%. It was down what, seven, eight days in a row.

Yep. So, you know, you could make a case. Well, why isn't it up 15% or 20%.

one of the things is that the CFO said margins will probably shrink. Right now, they're at 75%. Uh, back down to 71 72%. U, which happens with every industry. 75% is just a massive margin to re retain. So that was one little thing.

and then the other thing that a lot of people are increasingly pointing to is that they are funding their clients, their customers. So they're lending money or investing in companies that then turn around and buy their chips.

And you know it's their account receivables I think were up over 100%. Yeah, I was going to kind of point to that. Yeah, I was going to I was going to I have a note in the chart I posted this morning. Uh receivables grew 127% against 106% revenue growth. Day sales outstanding is now 60 days up from 54.

Here I have a chart of of receivables growth for um Nvidia. Um if you take a look this is so this is the Nvidia's net quarterly earnings and you can this is just kind of a breakdown. So this is data center, hyperscaler, AI clouds, internet enterprise, edge computing. those receivables are sitting inside of that ear those earnings projections but these are take or pay contracts and so if the if the company comes out and says hey you know I don't need those chips doesn't matter you got to pay for them anyway and I think that's an important caveat that you need to understand going into this when you start I mean people talk about receivables it's like oh yeah the balance sheet's carrying more of the load yes that is true the balance sheet is carrying more of the load for Nvidia but on a on relative basis. It's a not that large relative to what it's generating, but these are also take or pay contracts.

And well, and the other thing is of the 63 or so billion, how much is Amazon and Google and Meta and Microsoft and companies that have very good credit ratings and have incredible, you know, amounts of revenue and cash flow coming in. So, it's very good quality.

Uh, and you know what this is? It gets a bad rep, but this happens in every business. I, you know, I think the the and like mentally I kind of compare this to the automakers. When you go buy a car, they're pushing you to take a loan with them. They incentivize you. Like in many cases, even if you want to pay cash, you take the loan, pay the loan for a month or two, and then you pay back the loan because you're incentivized to do it. So they're pushing they're, you know, the automakers are pushing you to take a loan to buy the car. Same sort of thing. The difference is that the credit quality of of Nvidia's customers are so much better than people buying cars.

So, you know, it's, you know, in 2008, we saw Ford Motor Credit, which is not Ford, and GM uh credit, which is not GM, their subsidiaries. they either failed or they were pretty close to failing. Um, if this accounts receivable fails or part of it doesn't pay off, that's telling you that there's a much bigger problem with data centers and and the largest companies in America. And by the way, it's 63 billion. How much did they make in revenue uh this last year? They had 96 billion. Right. So yeah, it would be a huge hit and it would but I think it's more telling for the industry. Nvidia is in the driver's seat right now. Uh so there are certain things in their earnings report like every earnings report to nitpick at but I think they just blew the doors. Off off earnings.

Yeah. And again, you know, immediately when they report earnings like yeah, well, how much of this is open AI or how much of it is this that or this thing and and some of these commitments are those commitments are certainly there and and you know there's a lot of conversation about circular financing and these type of things. A circular financing is not new. We've talked about this before. Every industry does it. But what you're banking on if you're bearish Nvidia, right? And you're saying, "Well, Nvidia is going to fail because of Open AI." You have to assume that Open AI is going to fail. But even if Open AI fails, what does that mean? Because if Open AI fails, these are data center lease obligations and somebody just steps in and takes over that data center, probably anthropic or somebody else because whoever wins this game. The only way Open AI fails is if somebody else wins.

And one of the other things that that Nvidia noted uh last night is actually this morning uh the news came out that they're they're buying hugging face which is an open-source AI platform. So now Nvidia is not only making the chips and this is also kind of one of the other misnomers about Nvidia. It's like oh all they do is make chips. So if OpenAI fails then then Nvidia fails. That's not true at all. Nvidia has been in vertically integrating themselves and this acquisition of hugging face is another step in that vertical integration of the entire AI chain from actually the chips through the AI complex itself. Um they took a stake in um XAI as well through through Grock. So they have that exposure also. So they, you know, they're vertically integrating their systems so that not only do they have the revenue coming in just from selling the chips, they're also going to be developing the revenue on the use of those chips as well, which is something that you have to really pay attention to,

right? And they have a new chip coming, the as we like to call it in the office, the Vera Wang. Uh it's actually it's the Vera Ver Ruben. It's actually the Vera Rubin. Uh but uh but you know wedding dresses is so much better than than you know dark matter analysis diversifying their diversification is is incredible. Uh but but everything they're reporting about about that ship and moving from the old ship to that ship is very promising as well.

So you know again it's I'm not sure that he really could have painted a uh better picture for Nvidia. And you know, again, I bet the stock is I haven't looked, but over the last eight days, even with it being up eight% is probably still down for the last 10 days or so.

Yeah, it's it's going to be about even more. Yeah, it's going to be a little it's going to be kind of closer to breaking even this morning. And again, we'll see how the it ends up today. I mean, you know, the the option we talked about this yesterday, the option implied move today was only 5.1%. Oh, that's low, right? Yeah. So, the the the expectations weren't high going into this. And so, we'll see, you know, how how we finish up. Maybe we open the high today and sell off the rest of the day. But no, um, you know, Mike's point is is that yeah, the the stock's going to open up about 8%. It's actually pre-market right now. It's up 6% premarket. And we've just kind of been in the sideways consolidation here, and we're kind of back towards this previous top that we had set just a couple of weeks ago. So, it had a nice move and then it kind of sold off a bit going into the earnings announcement. So, we're going to get a pop today. We'll see what kind of follow-through we get, but to Mike's point, the stock's really just kind of been stuck going nowhere now for a couple of months. Uh, you know, we had a really big move coming out of March, March, April, and May. And really kind of since June has just kind of been consolidating that move to a large degree. So, as we talked about yesterday morning, you know, Nvidia was oversold enough going into this report that the the a bounce this morning was not that surprising because the it had sold off going into that. But again, you know, we'll see how it kind of plays out today for the overall market.

Yeah. And I think what's interesting is if you look at the heat map today, if Nvidia hadn't reported, today was probably going to be a down day. At least on the open, a down day. Just about everything else is red except for the chip companies and a couple of the uh companies that are involved with data centers.

and that is a that is a kind of stupid little game I play with myself in the morning. I'll look at the heat map before the futures and I, you know, kind of guess, oh, the market will be up a little, down a little, up a lot, down a lot, whatever. And today's one of those tricky ones where you have to remember that Nvidia's what about 8% of the S&P? Mhm. So, if it's 8% and it's up 6%, it's contributing roughly 48 basis points to the S&P 500. So, if if no other stock changed on a day, the S&P would be up almost half a percent. just on Nvidia, right? Then you throw in some of those other chip companies and it offsets 450 other stocks that are trading flat or lower. So it's the math is interesting.

Yes, a good example. Nvidia is doing deals with Open AI. If you're assuming that Open AI is going to be a complete failure and that nobody's ever going to use chat GTP, chat GBT... then yeah, Nvidia's got a problem.

But I don't think Nvidia is stupid enough. I mean, this is a company that has been very strategic in what they're building and what they're doing. They're not just going to go out and just willy-nilly give companies money if they don't see the vision of where that's going to be and what those opportunities are going to do.

I think you have to give some credence to the intelligence of Nvidia in making those investments and not just assume they're willy-nilly just making an investment something that's going to go completely bankrupt.

you can't put all your eggs in Nvidia.