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TradeXedarT

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- TradeXedarTTradeXedarT
  ·2024-11-16
  Share your opinion about this news…
  How Large Can Nvidia Realistically Grow
  SummaryNvidia Corporation's AI-driven growth has been exceptional, with data centers now comprising 88% of revenue, leading to a 38% stock increase since my last upgrade.Nvidia's market cap is $3.6T,
  How Large Can Nvidia Realistically Grow
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- TradeXedarTTradeXedarT
  ·2022-10-18
  $Tesla Motors(TSLA)$
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- TradeXedarTTradeXedarT
  ·2022-10-14
  $Tesla Motors(TSLA)$
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- TradeXedarTTradeXedarT
  ·2022-10-03
  $Tesla Motors(TSLA)$
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- TradeXedarTTradeXedarT
  ·2022-07-21
  Power la
  Tesla Q2 Fair But Not Spectacular
  SummaryQ2 revenues in line while earnings beat on Bitcoin sales.Automotive margins were a little dis
  Tesla Q2 Fair But Not Spectacular
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- TradeXedarTTradeXedarT
  ·2022-07-21
  Go go go
  Sorry, this post has been deleted
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- TradeXedarTTradeXedarT
  ·2022-07-21
  Nice
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- TradeXedarTTradeXedarT
  ·2022-07-18
  [Smile] [Happy]
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- TradeXedarTTradeXedarT
  ·2022-07-15
  [Cool]
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- TradeXedarTTradeXedarT
  ·2022-07-11
  Ok
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your opinion about this news…","listText":"Share your opinion about this news…","text":"Share your opinion about this news…","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/371636580577400","repostId":"1162498604","repostType":2,"repost":{"id":"1162498604","kind":"news","pubTimestamp":1731721233,"share":"https://ttm.financial/m/news/1162498604?lang=&edition=fundamental","pubTime":"2024-11-16 09:40","market":"us","language":"en","title":"How Large Can Nvidia Realistically Grow","url":"https://stock-news.laohu8.com/highlight/detail?id=1162498604","media":"seekingalpha","summary":"SummaryNvidia Corporation's AI-driven growth has been exceptional, with data centers now comprising 88% of revenue, leading to a 38% stock increase since my last upgrade.Nvidia's market cap is $3.6T, ","content":"<html><head></head><body><h2><strong>Summary</strong></h2><ul><li><p>Nvidia Corporation&#39;s AI-driven growth has been exceptional, with data centers now comprising 88% of revenue, leading to a 38% stock increase since my last upgrade.</p></li><li><p>Nvidia&#39;s market cap is $3.6T, with a Blended P/E of 58.5x; future growth depends on maintaining its competitive edge in AI and data centers.</p></li><li><p>I project Nvidia&#39;s revenue to grow at a 24% CAGR until 2029, potentially reaching a market cap of $5.69T to $6.32T, offering attractive returns.</p></li><li><p>Nvidia&#39;s future opportunities include AI, gaming, automotive, and industrial applications, with innovations like the Blackwell GPU architecture driving growth.</p></li></ul><p></p><p class=\"t-img-caption\"><img alt=\"Nvidia headquarters in Santa Clara, California, USA\" src=\"https://community-static.tradeup.com/news/f8271f5218e30171f478337709702edd\" data-align=\"center\" tg-width=\"750\" tg-height=\"500\"/><span></span></p><p></p><p><strong>JHVEPhoto</strong></p><p></p><p>I last wrote coverage about <strong>NVIDIA</strong> <strong>Corporation</strong> (<span>NASDAQ:</span><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/NVDA#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"NVIDIA Corporation\"><span>NVDA</span></a>) back in September, upgrading the stock to a buy in the <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/article/4719953-nvidias-stock-is-a-gift-at-105-rating-upgrade#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"\">article</a> “<em>Nvidia&#39;s Stock Is A Gift At $105.</em>” My upgrade followed the broader market<span> weakness in late summer, particularly in the high-flying semis. Despite the downturn, which seemed like a healthy correction, mega-cap companies are not yet showing signs of exhaustion, and their CAPEX spending continues to balloon to record levels, fueling Nvidia&#39;s growth. At the same time, Nvidia&#39;s data center market share remains relatively stable despite increased competition, and the gross margins are continuously healthy, above 75%.</span></p><p>Since my rating upgrade, the stock <span>has been up 38%, compared to a roughly 9% gain in the broader market (</span><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/SP500#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"\"><span>SP500</span></a><span>), proving my call was accurate. However, I won&#39;t be patting myself on the shoulder just yet, as in the bull market,</span> buying quality almost always means positive returns.</p><p>Below, you can see my previous Nvidia calls and the performance that followed:</p><p></p><p class=\"t-img-caption\"><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://static.seekingalpha.com/uploads/2024/11/15/48899823-17316678764572036_origin.png\" title=\"\"><img alt=\"Previous Coverage\" src=\"https://community-static.tradeup.com/news/538d1a14a6c8d2ebb6085e632e9c44b5\" data-align=\"center\" tg-width=\"640\" tg-height=\"554\"/></a><span></span></p><p><strong>Previous Coverage </strong><span><strong>(Seeking Alpha)</strong></span></p><p></p><p>Now, Nvidia is valued at $3.6T, making it the most valuable company of them all. It trades at a Blended P/E of 58.5x. The fair question to ask ourselves is how large Nvidia can realistically grow, and whether it still presents a good investment opportunity.</p><p>I previously purchased shares of Nvidia myself at around $400/share pre-split, and now I am sitting on major gains.</p><h2><strong>Nvidia&#39;s Previous Growth</strong></h2><p>Before looking into the future, let&#39;s first look at Nvidia&#39;s success in the past few years and what has fueled its growth.</p><p>The adoption of AI has been Nvidia&#39;s primary growth driver, as the company&#39;s innovation has led to being at the right time, at the right place, with the right product. The GPUs using the Hopper Infrastructure, such as the A100 and H100 series, were so far the backbone of AI training and inference, powering generative AI models, such as the widely used ChatGPT, Perplexity, Copilot, etc. The AI “revolution,” a term tossed around a lot, has led to increased demand for Nvidia&#39;s products for cloud computing and enterprise applications without signs of exhaustion, particularly as Nvidia is starting to sell new, more advanced Blackwell architecture.</p><p>That&#39;s mainly why Nvidia&#39;s data center segment <span>has experienced exponential growth. It is fueled by the “so-called” cloud hyperscalers such as <strong>Microsoft Corporation</strong> (</span><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/MSFT#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"Microsoft Corporation\"><span>MSFT</span></a><span>) with Azure, <strong>Alphabet Inc. </strong>(</span><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/GOOG#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"Alphabet Inc.\"><span>GOOG</span></a><span>), (</span><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/GOOGL#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"Alphabet Inc.\"><span>GOOGL</span></a><span>) with Cloud, and<strong> Amazon.com, Inc.</strong> (</span><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/AMZN#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"Amazon.com, Inc.\"><span>AMZN</span></a><span>) with AWS, as the CAPEX spend ballooned in the race for the </span>most advanced AI infrastructure.</p><p></p><p class=\"t-img-caption\"><img alt=\"CAPEX Spending\" src=\"https://community-static.tradeup.com/news/dbfc43252fc36f9c7bb4da2ab167a6fa\" data-align=\"center\" tg-width=\"1280\" tg-height=\"1055\"/><span></span></p><p><strong>CAPEX Spending </strong><span><strong>(Sherwood)</strong></span></p><p></p><p>But that wasn&#39;t always the case. Previously, Nvidia&#39;s business has centered around GPUs powering gaming. Still, this narrative is long gone, with the business innovating and ultimately reinventing itself to become the fundamental brick in the new computing era. Data centers now make up around 88% of its total revenue, compared to less than 50% just 2 years ago.</p><p></p><p class=\"t-img-caption\"><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://static.seekingalpha.com/uploads/2024/11/15/saupload_87541ba43b848974db24c71459813a34.png\" title=\"\"><img alt=\"Nvidia Revenue Breakdown\" src=\"https://community-static.tradeup.com/news/98cc9eccd312b3ef53618f803e5a7cef\" data-align=\"center\" tg-width=\"1280\" tg-height=\"718\"/></a><span></span></p><p><strong>Nvidia Revenue Breakdown </strong><span><strong>(App Economy Insights)</strong></span></p><p></p><p>The graphs above very well depict Nvidia&#39;s stellar growth quarter over quarter, but let&#39;s look at annual revenue growth:</p><ul><li><p><strong>FY22:</strong> $26.91B, YoY 61% growth.</p></li><li><p><strong>FY23:</strong> $26.97B, YoY 0% growth.</p></li><li><p><strong>FY24:</strong> $60.92B, YoY 226% growth.</p></li><li><p><strong>FY25:</strong> (Actual YTD $56.08B + Estimate YTG $69.51B) = $125.59B, YoY 206% growth.</p></li></ul><p>These are stellar growth numbers and perhaps the most significant success story I have seen during my investment career. Nonetheless, the law of large numbers is clear: the larger the company gets, the more difficult it becomes to grow its top line, and moving forward, it will become increasingly difficult for Nvidia to grow at such unprecedented rates.</p><h2><strong>Nvidia&#39;s Future Opportunity</strong></h2><p>Nvidia&#39;s AI GPU first-mover advantage has given the company a competitive advantage in establishing its market share before any other company could, with <strong>Advanced Micro Devices, Inc.</strong> (<a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/AMD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"Advanced Micro Devices, Inc.\">AMD</a>) and <strong>Intel Corporation</strong> (<a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/INTC#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"Intel Corporation\">INTC</a>) now playing catch-up.</p><p><a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://wccftech.com/nvidia-dominated-aib-gpu-market-q1-2024-88-percent-market-share-amd-12-intelt-0/#:~:text=Overall%20Q1%20AIB%20GPU%20Shipments,%25%2C%20AMD%20%26%20Intel%20Nowhere%20Close\" title=\"\">According to TechSpot</a>, Nvidia&#39;s GPU market share was 88% in Q1 2024, an increase from 80% in the prior year. That&#39;s particularly important because we see the competition intensify, both from other semi-companies and the already mentioned cloud hyperscalers. They are developing their in-house chips to address their custom needs, but so far, Nvidia&#39;s position remains unchallenged, perhaps due to their engineering superiority. However, as time passes and the generational leaps in technology become less pronounced, I expect Nvidia&#39;s market share to fall, and its gross margin will eventually decline.</p><p>Let&#39;s now look at how large the AI chip market is and how fast it&#39;s expected to grow.</p><p>If we assume Nvidia&#39;s trailing twelve-month data center revenue of $81.75B and their market share of 88%, we can conclude that the current overall market size is around $92.9B.</p><p>If we look at the forecast from MarketsandMarkets, <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://www.marketsandmarkets.com/PressReleases/ai-chipset.asp\" title=\"\">they are estimating</a> the market size to reach $311B by 2029, which would represent a 19% CAGR from today.</p><p>However, for instance, <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://www.asiafinancial.com/chipmaker-amd-forecasts-400bn-data-centre-ai-chip-market#:~:text=Chipmaker%20AMD%20says%20it%20expects,of%20AI%20chips%20on%20Wednesday.\" title=\"\">AMD is expecting</a> the market to grow to as large as $400B by the end of 2027, which would be a 34% CAGR, which is quite optimistic, in my opinion.</p><p>Nonetheless, this shows us that the market size forecasts are all over the place. However, Nvidia is still positioned as the key beneficiary in capturing a significant portion of this opportunity.</p><p>If we assume Nvidia&#39;s data center revenue grows in line with the market, Nvidia&#39;s data center revenue could reach anywhere between $138B — $197B by the end of 2027 and $195B by the end of 2029, depending on the growth estimate we use in our calculation, as per below, if we assume no market share loss over the following years:</p><table><colgroup><col/><col/><col/><col/><col/><col/><col/></colgroup><tbody><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Data Center Revenue Growth</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2024</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2025</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2026</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2027</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2028</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2029</strong></span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>19% CAGR (MarketsandMarkets)</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$82</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$97</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$116</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$138</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$164</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$195</span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>34% CAGR (AMD)</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$82</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$110</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$147</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$197</span></p></td><td colspan=\"1\" rowspan=\"1\"><p></p></td><td colspan=\"1\" rowspan=\"1\"><p></p></td></tr></tbody></table><p>Several market trends and innovations, such as the new Blackwell GPU Architecture, should unlock this growth for Nvidia. Production is on track to ramp up in H2 2024, and sales will follow suit as soon as Q1 2025. This new architecture promises 25x more cost-effective and energy-efficient GPUs for training LLM, with energy being one of the main hurdles for AI data centers.</p><p>Following the successful implementation of generative AI into services such as ChatGPT, Microsoft&#39;s Copilot, and cloud-based offerings, governments around the world are expected to start investing in AI systems tailored to their custom needs. This untapped opportunity could become a significant revenue stream in the future.</p><p>But that&#39;s not all. We should not forget other Nvidia business segments, which are poised to contribute meaningfully to revenue growth in the future as well.</p><p><strong>Gaming</strong> has historically been the core revenue driver. While now the segment makes up around 10% of the overall revenue on a trailing twelve-month basis, the synergies between AI and gaming with enhancements in computer graphics and game dynamics could drive stronger sales in this segment. I am assuming a relatively modest 4-6% CAGR growth.</p><p>Likewise, Nvidia&#39;s DRIVE platform has the potential to drive more revenue in the future, particularly as the autonomous vehicle market grows. In fact, the <strong>automotive</strong> AI chip market is projected to grow 31% CAGR, reaching $109B by 2030. If Nvidia captures 20-25% of this market, it could add $20-30B annually in automotive revenue. Meanwhile, Nvidia&#39;s Omniverse platform and digital-twin technology have broad applications in industrial simulation, robotics, and generative AI, potentially adding $10-$15B in revenue by 2029.</p><table><colgroup><col/><col/><col/><col/><col/><col/><col/></colgroup><tbody><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Segment Revenue</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2024</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2025</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2026</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2027</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2028</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span><strong>2029</strong></span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Data Centers</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$82</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$103</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$131</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$165</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$209</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$265</span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Gaming</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$11</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$12</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$12</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$13</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$14</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$14</span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Automotive</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$3</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$5</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$7</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$11</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$17</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$25</span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Other</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$-</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$2</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$3</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$5</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$7</span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$12</span></p></td></tr><tr><td colspan=\"1\" rowspan=\"1\"><p><span><strong>Total</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$<strong>96</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$<strong>122</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$<strong>154</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$<strong>194</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$<strong>247</strong></span></p></td><td colspan=\"1\" rowspan=\"1\"><p><span>$<strong>316</strong></span></p></td></tr></tbody></table><p>Combining all the segments, supported by strong AI growth but taking an average 26.5% CAGR growth in the data center segment, Nvidia&#39;s revenue could reach around $320B annually by the end of 2029, supporting further market cap expansion.</p><p>Now, the semiconductor business is inherently cyclical, driven by the swings in demand influenced by the underlying economy, and that has had an impact on Nvidia&#39;s net profit <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/NVDA/profitability#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"\">margins</a> in the past:</p><ul><li><p><strong>FY 2020:</strong> 25.61%.</p></li><li><p><strong>FY 2021:</strong> 25.98%.</p></li><li><p><strong>FY 2022:</strong> 36.23%.</p></li><li><p><strong>FY 2023:</strong> 16.19%.</p></li><li><p><strong>FY 2024:</strong> 48.85%.</p></li></ul><p>… and likely will have an impact in the future. Nvidia&#39;s net profit margin over the past 5 years has been 30.5%, but we see a significant divergence from the mean in FY24 thanks to the AI segment, which has fundamentally shifted Nvidia&#39;s business towards a higher margin segment. For the sake of this valuation exercise, I would feel comfortable using a future net margin of around 40%.</p><p>A $320B annual run rate revenue and 40% net margin result in a net income of $126.4B by the end of 2029. For the past 15 years, Nvidia&#39;s <a target=\"_blank\" rel=\"noopener noreferrer nofollow\" href=\"https://seekingalpha.com/symbol/NVDA/valuation/metrics#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link\" title=\"\">stock traded</a> on average at a P/E multiple of 36x, but again, the business has accelerated growth and improved margins. Hence, a higher multiple of 45-50x is realistic, thanks to the improved fundamentals.</p><p>At a P/E multiple of 45x (bear case), Nvidia would be valued at $5.69T at the end of 2029, and at a P/E multiple of 50x (bull case), it would be valued at $6.32T.</p><p>Compared to today&#39;s market cap of $3.6T, this would represent a growth of 58% to 76% in the next 5 years, which I consider relatively attractive.</p><h2><strong>Investor&#39;s Takeaway</strong></h2><p>Nvidia has been the key beneficiary of the AI investment narrative, with CAPEX spending ballooning in the race to build “state-of-the-art” AI data centers by the hyperscalers.</p><p>As a result, the company has become the most valuable of them all, with a current market cap of $3.6T. It&#39;s valid to ask how far Nvidia can grow as the law of large numbers starts dragging on its growth rates.</p><p>In this article, I tried to demonstrate the expected growth rates of data centers, gaming, automotive, and other segments, which will drive Nvidia&#39;s revenue for the remainder of the decade.</p><p>Overall, I expect Nvidia&#39;s revenue to grow at 24% CAGR until the end of 2029. If the company manages to retain its net margins at the higher end of the historical range, it could reach a market cap of around $5.69T in the bear case and $6.32T in the bull case, with relatively attractive returns moving forward.</p></body></html>","source":"lsy1642056764450","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Large Can Nvidia Realistically Grow</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Large Can Nvidia Realistically Grow\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-16 09:40 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4737876-how-large-can-nvidia-realistically-grow><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryNvidia Corporation's AI-driven growth has been exceptional, with data centers now comprising 88% of revenue, leading to a 38% stock increase since my last upgrade.Nvidia's market cap is $3.6T, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4737876-how-large-can-nvidia-realistically-grow\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NVDA":"英伟达"},"source_url":"https://seekingalpha.com/article/4737876-how-large-can-nvidia-realistically-grow","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1162498604","content_text":"SummaryNvidia Corporation's AI-driven growth has been exceptional, with data centers now comprising 88% of revenue, leading to a 38% stock increase since my last upgrade.Nvidia's market cap is $3.6T, with a Blended P/E of 58.5x; future growth depends on maintaining its competitive edge in AI and data centers.I project Nvidia's revenue to grow at a 24% CAGR until 2029, potentially reaching a market cap of $5.69T to $6.32T, offering attractive returns.Nvidia's future opportunities include AI, gaming, automotive, and industrial applications, with innovations like the Blackwell GPU architecture driving growth.JHVEPhotoI last wrote coverage about NVIDIA Corporation (NASDAQ:NVDA) back in September, upgrading the stock to a buy in the article “Nvidia's Stock Is A Gift At $105.” My upgrade followed the broader market weakness in late summer, particularly in the high-flying semis. Despite the downturn, which seemed like a healthy correction, mega-cap companies are not yet showing signs of exhaustion, and their CAPEX spending continues to balloon to record levels, fueling Nvidia's growth. At the same time, Nvidia's data center market share remains relatively stable despite increased competition, and the gross margins are continuously healthy, above 75%.Since my rating upgrade, the stock has been up 38%, compared to a roughly 9% gain in the broader market (SP500), proving my call was accurate. However, I won't be patting myself on the shoulder just yet, as in the bull market, buying quality almost always means positive returns.Below, you can see my previous Nvidia calls and the performance that followed:Previous Coverage (Seeking Alpha)Now, Nvidia is valued at $3.6T, making it the most valuable company of them all. It trades at a Blended P/E of 58.5x. The fair question to ask ourselves is how large Nvidia can realistically grow, and whether it still presents a good investment opportunity.I previously purchased shares of Nvidia myself at around $400/share pre-split, and now I am sitting on major gains.Nvidia's Previous GrowthBefore looking into the future, let's first look at Nvidia's success in the past few years and what has fueled its growth.The adoption of AI has been Nvidia's primary growth driver, as the company's innovation has led to being at the right time, at the right place, with the right product. The GPUs using the Hopper Infrastructure, such as the A100 and H100 series, were so far the backbone of AI training and inference, powering generative AI models, such as the widely used ChatGPT, Perplexity, Copilot, etc. The AI “revolution,” a term tossed around a lot, has led to increased demand for Nvidia's products for cloud computing and enterprise applications without signs of exhaustion, particularly as Nvidia is starting to sell new, more advanced Blackwell architecture.That's mainly why Nvidia's data center segment has experienced exponential growth. It is fueled by the “so-called” cloud hyperscalers such as Microsoft Corporation (MSFT) with Azure, Alphabet Inc. (GOOG), (GOOGL) with Cloud, and Amazon.com, Inc. (AMZN) with AWS, as the CAPEX spend ballooned in the race for the most advanced AI infrastructure.CAPEX Spending (Sherwood)But that wasn't always the case. Previously, Nvidia's business has centered around GPUs powering gaming. Still, this narrative is long gone, with the business innovating and ultimately reinventing itself to become the fundamental brick in the new computing era. Data centers now make up around 88% of its total revenue, compared to less than 50% just 2 years ago.Nvidia Revenue Breakdown (App Economy Insights)The graphs above very well depict Nvidia's stellar growth quarter over quarter, but let's look at annual revenue growth:FY22: $26.91B, YoY 61% growth.FY23: $26.97B, YoY 0% growth.FY24: $60.92B, YoY 226% growth.FY25: (Actual YTD $56.08B + Estimate YTG $69.51B) = $125.59B, YoY 206% growth.These are stellar growth numbers and perhaps the most significant success story I have seen during my investment career. Nonetheless, the law of large numbers is clear: the larger the company gets, the more difficult it becomes to grow its top line, and moving forward, it will become increasingly difficult for Nvidia to grow at such unprecedented rates.Nvidia's Future OpportunityNvidia's AI GPU first-mover advantage has given the company a competitive advantage in establishing its market share before any other company could, with Advanced Micro Devices, Inc. (AMD) and Intel Corporation (INTC) now playing catch-up.According to TechSpot, Nvidia's GPU market share was 88% in Q1 2024, an increase from 80% in the prior year. That's particularly important because we see the competition intensify, both from other semi-companies and the already mentioned cloud hyperscalers. They are developing their in-house chips to address their custom needs, but so far, Nvidia's position remains unchallenged, perhaps due to their engineering superiority. However, as time passes and the generational leaps in technology become less pronounced, I expect Nvidia's market share to fall, and its gross margin will eventually decline.Let's now look at how large the AI chip market is and how fast it's expected to grow.If we assume Nvidia's trailing twelve-month data center revenue of $81.75B and their market share of 88%, we can conclude that the current overall market size is around $92.9B.If we look at the forecast from MarketsandMarkets, they are estimating the market size to reach $311B by 2029, which would represent a 19% CAGR from today.However, for instance, AMD is expecting the market to grow to as large as $400B by the end of 2027, which would be a 34% CAGR, which is quite optimistic, in my opinion.Nonetheless, this shows us that the market size forecasts are all over the place. However, Nvidia is still positioned as the key beneficiary in capturing a significant portion of this opportunity.If we assume Nvidia's data center revenue grows in line with the market, Nvidia's data center revenue could reach anywhere between $138B — $197B by the end of 2027 and $195B by the end of 2029, depending on the growth estimate we use in our calculation, as per below, if we assume no market share loss over the following years:Data Center Revenue Growth20242025202620272028202919% CAGR (MarketsandMarkets)$82$97$116$138$164$19534% CAGR (AMD)$82$110$147$197Several market trends and innovations, such as the new Blackwell GPU Architecture, should unlock this growth for Nvidia. Production is on track to ramp up in H2 2024, and sales will follow suit as soon as Q1 2025. This new architecture promises 25x more cost-effective and energy-efficient GPUs for training LLM, with energy being one of the main hurdles for AI data centers.Following the successful implementation of generative AI into services such as ChatGPT, Microsoft's Copilot, and cloud-based offerings, governments around the world are expected to start investing in AI systems tailored to their custom needs. This untapped opportunity could become a significant revenue stream in the future.But that's not all. We should not forget other Nvidia business segments, which are poised to contribute meaningfully to revenue growth in the future as well.Gaming has historically been the core revenue driver. While now the segment makes up around 10% of the overall revenue on a trailing twelve-month basis, the synergies between AI and gaming with enhancements in computer graphics and game dynamics could drive stronger sales in this segment. I am assuming a relatively modest 4-6% CAGR growth.Likewise, Nvidia's DRIVE platform has the potential to drive more revenue in the future, particularly as the autonomous vehicle market grows. In fact, the automotive AI chip market is projected to grow 31% CAGR, reaching $109B by 2030. If Nvidia captures 20-25% of this market, it could add $20-30B annually in automotive revenue. Meanwhile, Nvidia's Omniverse platform and digital-twin technology have broad applications in industrial simulation, robotics, and generative AI, potentially adding $10-$15B in revenue by 2029.Segment Revenue202420252026202720282029Data Centers$82$103$131$165$209$265Gaming$11$12$12$13$14$14Automotive$3$5$7$11$17$25Other$-$2$3$5$7$12Total$96$122$154$194$247$316Combining all the segments, supported by strong AI growth but taking an average 26.5% CAGR growth in the data center segment, Nvidia's revenue could reach around $320B annually by the end of 2029, supporting further market cap expansion.Now, the semiconductor business is inherently cyclical, driven by the swings in demand influenced by the underlying economy, and that has had an impact on Nvidia's net profit margins in the past:FY 2020: 25.61%.FY 2021: 25.98%.FY 2022: 36.23%.FY 2023: 16.19%.FY 2024: 48.85%.… and likely will have an impact in the future. Nvidia's net profit margin over the past 5 years has been 30.5%, but we see a significant divergence from the mean in FY24 thanks to the AI segment, which has fundamentally shifted Nvidia's business towards a higher margin segment. For the sake of this valuation exercise, I would feel comfortable using a future net margin of around 40%.A $320B annual run rate revenue and 40% net margin result in a net income of $126.4B by the end of 2029. For the past 15 years, Nvidia's stock traded on average at a P/E multiple of 36x, but again, the business has accelerated growth and improved margins. Hence, a higher multiple of 45-50x is realistic, thanks to the improved fundamentals.At a P/E multiple of 45x (bear case), Nvidia would be valued at $5.69T at the end of 2029, and at a P/E multiple of 50x (bull case), it would be valued at $6.32T.Compared to today's market cap of $3.6T, this would represent a growth of 58% to 76% in the next 5 years, which I consider relatively attractive.Investor's TakeawayNvidia has been the key beneficiary of the AI investment narrative, with CAPEX spending ballooning in the race to build “state-of-the-art” AI data centers by the hyperscalers.As a result, the company has become the most valuable of them all, with a current market cap of $3.6T. It's valid to ask how far Nvidia can grow as the law of large numbers starts dragging on its growth rates.In this article, I tried to demonstrate the expected growth rates of data centers, gaming, automotive, and other segments, which will drive Nvidia's revenue for the remainder of the decade.Overall, I expect Nvidia's revenue to grow at 24% CAGR until the end of 2029. If the company manages to retain its net margins at the higher end of the historical range, it could reach a market cap of around $5.69T in the bear case and $6.32T in the bull case, with relatively attractive returns moving forward.","news_type":1,"symbols_score_info":{"NVDA":1.1}},"isVote":1,"tweetType":1,"viewCount":1434,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9983001747,"gmtCreate":1666102213889,"gmtModify":1676537706277,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><v-v data-views=\"1\"></v-v>","listText":"<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><v-v data-views=\"1\"></v-v>","text":"$Tesla Motors(TSLA)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9983001747","isVote":1,"tweetType":1,"viewCount":2423,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9980591869,"gmtCreate":1665759591751,"gmtModify":1676537661153,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><v-v data-views=\"1\"></v-v>","listText":"<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><v-v data-views=\"1\"></v-v>","text":"$Tesla Motors(TSLA)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9980591869","isVote":1,"tweetType":1,"viewCount":2060,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9912861464,"gmtCreate":1664800345458,"gmtModify":1676537510090,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><v-v data-views=\"1\"></v-v>","listText":"<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$</a><v-v data-views=\"1\"></v-v>","text":"$Tesla Motors(TSLA)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9912861464","isVote":1,"tweetType":1,"viewCount":2048,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9074553385,"gmtCreate":1658377076347,"gmtModify":1676536150316,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"Power la","listText":"Power la","text":"Power la","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9074553385","repostId":"1198482191","repostType":2,"repost":{"id":"1198482191","kind":"news","pubTimestamp":1658375462,"share":"https://ttm.financial/m/news/1198482191?lang=&edition=fundamental","pubTime":"2022-07-21 11:51","market":"us","language":"en","title":"Tesla Q2 Fair But Not Spectacular","url":"https://stock-news.laohu8.com/highlight/detail?id=1198482191","media":"Seeking Alpha","summary":"SummaryQ2 revenues in line while earnings beat on Bitcoin sales.Automotive margins were a little dis","content":"<html><head></head><body><p><b>Summary</b></p><ul><li>Q2 revenues in line while earnings beat on Bitcoin sales.</li><li>Automotive margins were a little disappointing.</li><li>Production ramp to continue nicely in back half of the year.</li></ul><p>After the bell on Wednesday, we received second quarter results from electric vehicle maker Tesla (NASDAQ:TSLA), which can be seen in this shareholder letter. We knew that overall results would be down sequentially from Q1 levels thanks to the Shanghai factory being shut down for a number of weeks. Investors were curious to see how this would impact profitability, especially when combined with two new factories ramping, and what this meant for the second half of 2022.</p><p>As I detailed in my earnings preview article, I wasn&#39;t going to be overly concerned with the headline numbers unless they were really out there one way or another. For the quarter, Tesla came in a little under $17 billion in revenue, right around what the street was expecting. I was a little light all around, except for leasing revenue that dropped sequentially. My guess is that I overestimated the stronger dollar impact here, plus it seems Tesla ramped solar and services a bit more than most expectations. Credit sales also came in higher than I was looking for, but still dropped significantly sequentially thanks to Q1&#39;s one-time benefit. In the graphic below, you can see the overall numbers against my three earnings cases. Dollar values are in millions except per share amounts.</p><p><img src=\"https://static.tigerbbs.com/8fa1c563724b0f9eaf8f641f9c1a5b9e\" tg-width=\"640\" tg-height=\"576\" referrerpolicy=\"no-referrer\"/></p><p>Tesla Q2 Results (Author Estimates, Company Report)</p><p>While I was low on revenues, I also was low on the cost of goods sold. I thought Tesla would surprise a bit with margins as it recently has, but that was not the case here. GAAP automotive gross margins fell by 5 percentage points sequentially to 27.9%, falling 90 basis points shy of my estimate, while non-GAAP fell by 3.8 percentage points to 26.2%. Tesla&#39;s gross profit dollar figure came in above my base case but was still below my bull case. The company made nice improvements in energy and services margins as those segments saw revenues jump sequentially.</p><p>On the operating side, Tesla&#39;s expenses came in lower than my projections. Research and development costs dropped about $200 million sequentially, which seems a little odd given all the products the company is supposedly working on at the moment. The major difference here was that restructuring and other costs were $400 million less than I figured. The reason here is that Tesla converted most of its Bitcoin to fiat currency during Q2, so there wasn&#39;t a massive impairment charge that many were looking for. The Bitcoin sale was a surprise given Elon Musk&#39;s past comments about holding the cryptocurrency.</p><p>Tesla&#39;s non-GAAP EPS came in above all three of my cases, mainly driven by the Bitcoin sale and other income items, which can vary wildly from quarter to quarter. Again, I&#39;m not going to make too much of the $2.18 figure beating the $1.80 average street estimate for Q2, given the Bitcoin sale and a variety of other one-time items for the quarter. I&#39;m guessing analysts will call this a &#34;better than feared&#34; quarter, but it wasn&#39;t exactly a blockbuster that bulls can really rally around.</p><p>On the cash flow front, Tesla reported free cash flow of $621 million, a bit less than the just under $1 billion the street was looking for. Tesla&#39;s cash balance rose to more than $18 billion, helped a bit by the Bitcoin sale. The one item that worried me a bit is that despite the huge drop in production, accrued liabilities and accounts payable rose again. This meant that Tesla&#39;s days payable outstanding rose to 80 from 72 in Q1 and 71 at the end of June 2021, so the 80 figure represents the highest value since Tesla started disclosing this metric.</p><p>Cash flow numbers are certainly helped when you continue to stretch out payments to your suppliers. Critics also might say that the Bitcoin sale was due to Tesla being in a little bit of a cash crunch. Even though cash rose to a quarter-ending record, the company reported less interest income in Q2 than it did in Q1, and that&#39;s despite interest rates rising. For a company with over $18 billion in cash, a quarterly interest income figure of just $26 million seems rather low.</p><p>Perhaps the biggest update we got in the shareholder letter was with regard to production capacity. For the first time in a while, Tesla management updated the Shanghai number, which now exceeds 750,000 vehicles a year as the graphic below shows. The company is close to 2 million units per year of installed capacity, and current expectations call for deliveries of about 1.4 million units this year. Tesla continued its forecast for long-term growth of 50% per year but didn&#39;t give an explicit figure for this year in the letter.</p><p><img src=\"https://static.tigerbbs.com/ad4c881ae60c13cff4b7d44453ad349a\" tg-width=\"529\" tg-height=\"264\" referrerpolicy=\"no-referrer\"/></p><p>Q2 Installed Annual Capacity (Q2 Earnings Report)</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla Q2 Fair But Not Spectacular</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla Q2 Fair But Not Spectacular\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-07-21 11:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4524590-tesla-q2-fair-but-not-spectacular?source=content_type%3Areact%7Cfirst_level_url%3Ahome%7Csection%3Aportfolio%7Csection_asset%3Aheadlines%7Cline%3A2><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryQ2 revenues in line while earnings beat on Bitcoin sales.Automotive margins were a little disappointing.Production ramp to continue nicely in back half of the year.After the bell on Wednesday, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4524590-tesla-q2-fair-but-not-spectacular?source=content_type%3Areact%7Cfirst_level_url%3Ahome%7Csection%3Aportfolio%7Csection_asset%3Aheadlines%7Cline%3A2\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://seekingalpha.com/article/4524590-tesla-q2-fair-but-not-spectacular?source=content_type%3Areact%7Cfirst_level_url%3Ahome%7Csection%3Aportfolio%7Csection_asset%3Aheadlines%7Cline%3A2","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1198482191","content_text":"SummaryQ2 revenues in line while earnings beat on Bitcoin sales.Automotive margins were a little disappointing.Production ramp to continue nicely in back half of the year.After the bell on Wednesday, we received second quarter results from electric vehicle maker Tesla (NASDAQ:TSLA), which can be seen in this shareholder letter. We knew that overall results would be down sequentially from Q1 levels thanks to the Shanghai factory being shut down for a number of weeks. Investors were curious to see how this would impact profitability, especially when combined with two new factories ramping, and what this meant for the second half of 2022.As I detailed in my earnings preview article, I wasn't going to be overly concerned with the headline numbers unless they were really out there one way or another. For the quarter, Tesla came in a little under $17 billion in revenue, right around what the street was expecting. I was a little light all around, except for leasing revenue that dropped sequentially. My guess is that I overestimated the stronger dollar impact here, plus it seems Tesla ramped solar and services a bit more than most expectations. Credit sales also came in higher than I was looking for, but still dropped significantly sequentially thanks to Q1's one-time benefit. In the graphic below, you can see the overall numbers against my three earnings cases. Dollar values are in millions except per share amounts.Tesla Q2 Results (Author Estimates, Company Report)While I was low on revenues, I also was low on the cost of goods sold. I thought Tesla would surprise a bit with margins as it recently has, but that was not the case here. GAAP automotive gross margins fell by 5 percentage points sequentially to 27.9%, falling 90 basis points shy of my estimate, while non-GAAP fell by 3.8 percentage points to 26.2%. Tesla's gross profit dollar figure came in above my base case but was still below my bull case. The company made nice improvements in energy and services margins as those segments saw revenues jump sequentially.On the operating side, Tesla's expenses came in lower than my projections. Research and development costs dropped about $200 million sequentially, which seems a little odd given all the products the company is supposedly working on at the moment. The major difference here was that restructuring and other costs were $400 million less than I figured. The reason here is that Tesla converted most of its Bitcoin to fiat currency during Q2, so there wasn't a massive impairment charge that many were looking for. The Bitcoin sale was a surprise given Elon Musk's past comments about holding the cryptocurrency.Tesla's non-GAAP EPS came in above all three of my cases, mainly driven by the Bitcoin sale and other income items, which can vary wildly from quarter to quarter. Again, I'm not going to make too much of the $2.18 figure beating the $1.80 average street estimate for Q2, given the Bitcoin sale and a variety of other one-time items for the quarter. I'm guessing analysts will call this a \"better than feared\" quarter, but it wasn't exactly a blockbuster that bulls can really rally around.On the cash flow front, Tesla reported free cash flow of $621 million, a bit less than the just under $1 billion the street was looking for. Tesla's cash balance rose to more than $18 billion, helped a bit by the Bitcoin sale. The one item that worried me a bit is that despite the huge drop in production, accrued liabilities and accounts payable rose again. This meant that Tesla's days payable outstanding rose to 80 from 72 in Q1 and 71 at the end of June 2021, so the 80 figure represents the highest value since Tesla started disclosing this metric.Cash flow numbers are certainly helped when you continue to stretch out payments to your suppliers. Critics also might say that the Bitcoin sale was due to Tesla being in a little bit of a cash crunch. Even though cash rose to a quarter-ending record, the company reported less interest income in Q2 than it did in Q1, and that's despite interest rates rising. For a company with over $18 billion in cash, a quarterly interest income figure of just $26 million seems rather low.Perhaps the biggest update we got in the shareholder letter was with regard to production capacity. For the first time in a while, Tesla management updated the Shanghai number, which now exceeds 750,000 vehicles a year as the graphic below shows. The company is close to 2 million units per year of installed capacity, and current expectations call for deliveries of about 1.4 million units this year. Tesla continued its forecast for long-term growth of 50% per year but didn't give an explicit figure for this year in the letter.Q2 Installed Annual Capacity (Q2 Earnings Report)","news_type":1,"symbols_score_info":{"TSLA":0.9}},"isVote":1,"tweetType":1,"viewCount":2176,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9074519291,"gmtCreate":1658371052913,"gmtModify":1676536149313,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"Go go go","listText":"Go go go","text":"Go go go","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9074519291","repostId":"2253685766","repostType":2,"isVote":1,"tweetType":1,"viewCount":2345,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9074207374,"gmtCreate":1658361993298,"gmtModify":1676536146294,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9074207374","repostId":"2253761928","repostType":2,"isVote":1,"tweetType":1,"viewCount":2108,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9075190580,"gmtCreate":1658156922740,"gmtModify":1676536114059,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"[Smile]&nbsp;[Happy]&nbsp;","listText":"[Smile]&nbsp;[Happy]&nbsp;","text":"[Smile] [Happy]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9075190580","isVote":1,"tweetType":1,"viewCount":2051,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9076428821,"gmtCreate":1657893971563,"gmtModify":1676536078351,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"[Cool]&nbsp;","listText":"[Cool]&nbsp;","text":"[Cool]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9076428821","repostId":"2251458832","repostType":2,"isVote":1,"tweetType":1,"viewCount":2090,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9071273411,"gmtCreate":1657547798033,"gmtModify":1676536023279,"author":{"id":"3576200971552042","authorId":"3576200971552042","name":"TradeXedarT","avatar":"https://community-static.tradeup.com/news/5487404dd40db685ae874197aafdca47","crmLevel":11,"crmLevelSwitch":1,"followedFlag":false,"idStr":"3576200971552042","authorIdStr":"3576200971552042"},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9071273411","repostId":"1164092479","repostType":2,"isVote":1,"tweetType":1,"viewCount":2462,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"defaultTab":"posts","isTTM":true}