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HomeVenture CapitalPricing Energy & Earnings in NVidia's Enterprise by @ttunguz

Pricing Energy & Earnings in NVidia’s Enterprise by @ttunguz

If we would have liked one other exclamation level on the super development alternative, NVidia’s earnings punctuated the euphoria with gusto.


Income grew 88% in 1 / 4, almost doubling. The corporate had projected $11b & exceeded projections by $2.5b or 26%.

The Knowledge Heart enterprise, which sells to clouds & shopper corporations drove almost the entire development, surging 141% quarter-over-quarter to $10.3b & almost 3x yearly.


NVDA’s profitability is outstanding. During the last 12 months, the corporate’s working prices haven’t elevated greater than 15% but, web earnings (revenue) has quadrupled. The corporate’s pricing energy at work : restricted provide & elevated demand pushes costs greater.

China demand remained throughout the historic vary of 20%-25% of Knowledge Heart income, implying the export rules imposed on chips doesn’t appear to have impacted the corporate.

a few of the stock metrics (this isn’t a software program firm!), stock is comparatively flat, however DSI (Days Gross sales Stock – the variety of days required to promote all present stock) has fallen 41% ; one other signal of unmet demand.

Long run provide obligations (pre-purchasing of supplies/stock) has elevated 53%, one other signal of consumers yelling for extra GPUs. Accounts receivable – which is the quantity clients owe NVidia for bought items however but haven’t paid – elevated greater than 70%.

Metric Q1 Q2
Stock, $b 4.6 4.3
DSI 165 97
Long run provide obligations, $b 7.3 11.2
Accounts receivable, $b 4.1 7.1

Jensen Huang, the corporate’s CEO, estimated worldwide knowledge facilities are price $1t with $250b spent on new chips every year. On the present run price, that means NVidia is capturing about 22% of that market.

AI has change into the engine pushing the expertise markets ahead – each on the infrastructure & software program ranges.



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