Nvidia Breaks Records—Again
Another quarter, another beat. Nvidia’s first-quarter revenue came in at a jaw-dropping $44.1 billion—comfortably above its own high-end guidance of $43.86 billion and Wall Street’s $43.29 billion estimate. That’s a 69% year-over-year surge, following a previous quarter that ballooned 78%. In an economy where many firms are praying just to meet consensus, Nvidia is busy re-writing the script. But after this earnings blowout, the pressing question is: can the stock hold its ground above the freshly reclaimed $150 level?
Where silicon meets sentience: Nvidia’s neural empire takes shape
A Market Darling with Monster Margins
Nvidia’s fundamentals continue to make Silicon Valley veterans look like slow-motion buffering. The company’s profit margin sits at an absurd 55.85%, while operating margins top 61%—more befitting a monopoly than a semiconductor firm. Return on assets? A muscular 57.42%. Return on equity? A supercharged 119.18%, helped by Nvidia’s modest debt-to-equity ratio of just 12.95%. When your balance sheet has $43 billion in cash, and you’re throwing off $64 billion in operating cash flow, the only existential threat is gravity.
But gravity is no small foe in markets. Nvidia’s current price-to-earnings ratio of 45.85 might seem nosebleed-worthy, yet the forward P/E drops to a more palatable 31.25. That implies investors are betting this AI juggernaut can keep earnings growing at a breakneck pace. And to be fair, that bet’s been a winning one: over the last three years, $NVIDIA(NVDA)$ has delivered a blistering total return of 618%, nearly fifteen times the S&P 500’s 42%.
Under the Hood: The Metrics That Matter
Despite its frothy valuation, Nvidia’s PEG ratio stands at 1.93—not cheap, but not bubble-esque either, especially when measured against 78% quarterly revenue growth. Its price-to-sales ratio is a lofty 25.62, but again, context matters. This isn’t a consumer brand hawking luxury handbags; it’s the beating heart of global AI infrastructure.
What some investors may overlook is the velocity of Nvidia’s earnings versus its pricing momentum. Year-to-date, NVDA is up just 0.4%, barely outpacing the S&P 500’s 0.12%. That’s despite quarterly earnings growth near 80% and a $3.3 trillion market cap that now challenges Apple’s supremacy. In other words, price performance has lagged the business performance—an unusual and possibly short-lived divergence.
Another hidden gem: Nvidia’s revenue per share has soared to $5.31, while book value remains a modest $3.24. That’s a sign of capital efficiency, not creative accounting. And don’t let the tiny 0.03% dividend fool you—the real shareholder return has come from capital appreciation and Nvidia’s 10-for-1 stock split, which aims to improve accessibility ahead of an inevitable retail investor feeding frenzy.
June: Pause or Push Higher?
So, will Nvidia’s stock hold above $150—or even break out to new highs in June? The odds favour a climb, though not without some theatrics. The stock's 52-week high sits at $153.13, and momentum indicators suggest it’s within striking distance. With short interest barely above 1% of float and institutional ownership near 68%, there’s little sign of large-scale profit-taking or panic.
Technically, the 50-day moving average is $115.37 and the 200-day sits at $126.46—both well below the current price of $141.37. That gap leaves plenty of air beneath the stock, but also signals it’s trading well above trend. Still, given Nvidia’s track record of guiding conservatively and executing aggressively, there’s enough fuel in the earnings engine to justify further gains.
Nvidia flirts with resistance: Will the trend lines bend?
Seasonally, June is often a tepid month for markets, with investors sunning themselves while volatility quietly creeps in. But $NVIDIA(NVDA)$ isn’t your average index filler. It’s the flagship of a secular AI boom, and demand for its high-margin datacentre chips isn’t ebbing—it’s accelerating. Enterprise spending on AI training models and inferencing workloads continues to spike, and Nvidia’s dominance in both hardware and software stacks makes it uniquely well-positioned to reap the benefits.
Nvidia’s tools of choice in the AI gold rush
Cautiously Optimistic, Unapologetically Bullish
Am I buying at $141? Not quite—but strength like this rarely stays on sale for long. While the valuation isn’t for the faint of heart, Nvidia is one of the rare companies where the fundamentals actually support the hype. A forward P/E of 31 for a firm growing revenue at 70%-plus clips? That’s not exuberance—that’s asymmetry.
Sure, the road from here may come with dips, tweets, and tantrums. But absent a collapse in AI demand or a catastrophic geopolitical shock, $NVIDIA(NVDA)$ has the pricing power, the product roadmap, and the profits to justify its current valuation—and more. In a market increasingly shaped by scarcity of quality growth, Nvidia isn’t just participating in the AI revolution; it’s supplying the pickaxes, shovels, and the entire data centre town.
June could bring a bout of consolidation or even some healthy profit-taking. But in my view, Nvidia above $150 isn’t a bubble. It’s just the new baseline.
@TigerStars @Daily_Discussion @Tiger_comments @Tiger_SG @Tiger_Earnings @TigerClub@ @TigerWire
Comments
A salute to Jensen Huang!