At first glance, the story after Nvidia's (NVDA) latest eye-popping earnings report is all about financials.
It's incredible to see such growth at Nvidia's scale.
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Total sales: +265% YoY
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Data Center: +409% YoY
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Visualization: +105% compared to last year
The company's guidance was equally impressive.
But once the shock and awe wears off, I think you'll see the Street turn its attention to Nvidia and really try to figure out how this company will grow in 2025 and 2026. There was some talk on the street this morning about him being Nvidia on the move. Growth is expected to slow sharply next year as big tech companies such as Microsoft rein in AI spending after two years of heavy investments.
In response to this new debate, I would like to introduce Stifel analyst Ruben Roy's key points.
Roy doesn't rule out the idea that Nvidia's miraculous growth will slow next year, but the company's efforts to diversify its revenue base mean it won't fall off a cliff. I claim not.
Roy says:
“We found management's comments on revenue diversification noteworthy as questions mount about the sustainability of NVIDIA's growth. Continued growth in networking and software, plus related to sovereign AI deployments. Nvidia's overall data center revenue is increasingly diversified across industries and geographies, including contributions from increased demand for may continue.
“NVIDIA continues to believe that the transition from general-purpose computing to accelerated computing represents a $1 trillion opportunity over the long term.As the AI Factory concept takes shape, management continues to We think there is a potential $1 trillion opportunity to continue.”
Back to the wonders of Nvidia's numbers…for now.
