UBS: NVIDIA Q3 2024, the most important financial report in the universe is coming, target hitting 185?

LB Select
2024.11.20 10:37
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On August 20th, after the market close in Eastern Time, NVIDIA will disclose its Q3 financial report. Considering a series of recent macro events, it is estimated to be one of the most closely watched financial reports in the world. Let's take a look at UBS's Q3 outlook

Source: Hedgie AI&Cloud

  1. Earnings Expectations and Price Target Increase

Market expectations rise: Investor expectations for NVIDIA have increased in recent weeks, likely due to optimism surrounding NVIDIA's upcoming earnings report.

Price target raised to $185: UBS has raised the target price from $150 to $185, based on expectations for NVIDIA's future revenue and profit growth.

  1. Revenue and Profit Expectations

Q3 revenue expectations: Revenue is expected to be between $3.45 billion and $3.5 billion, reflecting continued growth in the data center business.

Q4 guidance expectations: The revenue guidance for the fourth fiscal quarter is expected to be around $37 billion, with potential to rise to $39 billion, indicating confidence in future revenue growth.

Gross margin changes: Gross margin is expected to decline by about 2% to around 73%, likely due to new product launches and changes in cost structure.

  1. Data Center Business Growth

Data center revenue growth: The data center business is expected to continue growing, with Q4 revenue approaching $35 billion, reflecting strong performance for NVIDIA in the data center market.

Sustainability of growth: This growth trend is expected to continue into 2025, likely due to sustained demand for high-performance computing in data centers.

  1. Background of Hyperscale Capital Expenditure

Capital expenditure plans rising: Capital expenditure plans for hyperscale data centers are on the rise, which may provide NVIDIA with more market opportunities.

Revenue gap narrowing: The gap between NVIDIA's data center revenue and competitors is expected to narrow within the next 12 months, indicating NVIDIA's competitiveness in the data center market.

The report is lengthy and will not be elaborated here. For the original text or other research summaries, please click [View] and reply "original" on the official account homepage to obtain it.

  1. National AI Team's Next Move

Sovereign AI investment growth: Sovereign AI has become an important demand driver for NVIDIA, with related revenue expected to exceed $10 billion in 2024, reflecting global investment trends in AI technology.

  1. Investment Returns and Cost Savings

Google and Amazon cases: Google's growth in search and cloud revenue, along with Amazon's reduction of approximately $260 million in development costs through the use of AI, are positive signs of investment returnsUse Case Growth: Use cases in both the public and private sectors are rapidly increasing, indicating an expansion in the application of AI technology.

  1. Product Roadmap and Market Expectations

GPU Product Roadmap: The data center GPU product roadmaps of NVIDIA and AMD demonstrate NVIDIA's leading position in technological innovation. (See the chart below)

Future Product Expectations: Expectations for NVIDIA's future products (such as Blackwell and Rubin) that may drive the company's growth in the future.

  1. Supply Chain and Capacity

Capacity Expectations Increase: UBS conducted a correlation analysis using NVIDIA's inventory this season combined with next season's revenue. The results are shown in the chart below (a red line takes off, specific calculation logic is not included).

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