"The world needs more computing." This simple statement by Jen-Hsun Huang last night on the Nvidia (NVDA) call, which was far more optimistic than a few weeks ago, is the main reason I believe you can believe in the business when it call the bottom here.
But the time frame? Now it's a different story. Nvidia has already called a bottom that did not spread. Has the pig in the inventory in the python finally reached the end?
The biggest theme of last night's call is yes, things are normalizing and they have to normalize in games first and then the data center next. There will be no comeback of crypto and there will be a continuation of something high-powered like artificial intelligence or machine learning or of course autonomous cars where I think Nvidia is the leader.
Now, it is clear that buyers are struggling too little to own one of the greatest practitioners of our lives, but a stock that has been cut in half of two misses because the company could not predict where Weak their markets really are.
I do not "blame them. Consider the thickness they had to see through: 1
Add a difficult transition to the most powerful series of graphics cards, yet the Turing family, and you end up with transition hole that accentuates difficulties in an unavoidable way. You just didn't need the power.
So what do they see now? They see the data center coming back on line. They see Fortnite and multiplayer free games, which is great for them. They see Dell ( Dell), HP (HPQ) and Lenovo (LNVGY) who record Turing, see no further downturn in China because it is a growth economy, and it has been a year since the crypto crash began, the average time for a ride bad reporting channel to rectify.
There are many bundles to call at once. So why should we really believe them? Simple: because Nvidia is not a cell phone chip maker. It is not a capital production company that produces heavy machinery to build mobile phone chips. It is NOT a supplier to Apple (AAPL).
Its bikes are unique, with only Advanced Micro (AMD) a comparable company and AMD also called the bottom.
So was it just a break? A nightmare visited a visionary company? No. It's about a company with amazing products, but suddenly had less growth, no growth, or an actual reverse for many reasons, that they might still be wrong. But we know that they are right with the driving need for more data processing. And that is ultimately why people want to jump on the gun and buy the stock without really having a true idea of the bottom of the orders and, more importantly, a pickup back to the old growth that gave them the highest number in the semiconductor industry.
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