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- Nvidia Corporation easily beat estimates in the latest earnings season, but Wall Street is not impressed.
- Despite an 8.5% earnings surprise in the third quarter and a 5.6% earnings surprise in the second quarter, the stock has been trading sideways since June 2024.
- Most of the growth has been priced in the stock, while the company continues to see higher competition as new AI chips are being launched.
- It is difficult to see how Nvidia will maintain a mid-70s gross margin despite the launch of Blackwell as new AI chip options gain market share in the upcoming quarters.
- Nvidia’s market cap is close to $3.5 trillion, which reduces the upside potential for the stock, despite a very strong AI demand and a huge buyback program.
Nvidia Corporation (NASDAQ:NVDA) easily beat the estimates in the recent quarterly earnings report. The company reported EPS of $0.81 which beat estimates by a whopping 8.5%. However, we did not see any positive momentum in the stock. I have worked in the technology sector for over 4 years. This included working with industry stalwarts like IBM. I have done my MBA in finance and have been covering various blue chip stocks for the past 6 years. Having hands-on knowledge in the technology sector has helped me gain valuable insights into the ups and downs of this sector and predict winners and losers more accurately.
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