Advisors weigh in on Nvidia’s earnings, outlook

investmentnews.com:

Okay financial advisors, the all-important second quarter results you’ve all been waiting for are finally out. AI-powering chipmaker Nvidia (Ticker: NVDA) handily beat analyst estimates on the top and bottom lines. It also offered stronger than expected guidance for the third quarter.

So now what’s the plan?

Nvidia reported second quarter revenue 15 percent higher than the previous quarter and up 122 percent from a year ago, and at $30 billion it surpassed the $28.9 billion that analysts were expecting. Earnings of 68 cents per share also beat the expected 64 cents. Gross margin came in at 75.1 percent, down from 78.1 percent in the first quarter, but still extraordinary by any standards.

All that said, investor concerns about the company’s third quarter revenue forecast sent the stock down post release. Nvidia announced Q3 sales estimates of $32.5 billion (plus or minus 2 percent), which is above the $31.9 billion average analysts penciled in for the company, but below Wall Street’s highest expectation of $37.9 billion.

Despite the market’s early disappointment with the company’s performance, or at least its forecast, Robert Pearl, co-founder and wealth advisor at G&P Financial, continues to see Nvidia as a “great long-time investment,” and is not selling the news.

“I believe that AI will have a lot of demand over the next decade as we will be globally facing a significant worker shortage,” said Pearl. “My hypothesis is that Nvidia will struggle to get back to recent highs until after the election, but post-election should regain its position as a market leader.” 

As for Nvidia’s impact on the greater market, Pearl points out that out of the last 7 quarterly earnings for the company, only 3 of the 7 times did the S&P