The star of Wall Street is none other than Nvidia, since its actions they shot up more than 16%, after the presentation of its latest balance sheet. In fact, the strong demand for its chips of artificial intelligence (AI) made his quarterly income They are also well above expectations. But given this it is worth asking: do the shares have a path to continue rising? Could a financial bubble be generated?
Nvidia: super balance and future projections
According to data from IOLinvestonline, The company obtained an earnings per share (EPS) of US$5.15 and revenues of US$22.1 billionfar exceeding expectations, given that analysts expected EPS of US$4.64 and revenues of US$20.62 billion.
The company saw grow your revenue by 265% year over year, and 22% compared to the previous quarter, mainly thanks to its data center units, which saw growth of 409% for the year. In fact, managed to increase its earnings per share by 765% year-on-year.
As for his guidanceare waiting income during the current quarter of around US$24,000 million, above the estimated figure of US$22,170 million.
How the stock will continue in the short term
The economist and capital market expert, José Ignacio Banoanalyzed the performance of the company’s stock: “What had happened prior to the presentation of the balance sheet is that, after the enormous increase that occurred throughout the last year, The previous days it had fallen since they made a profit, but then it presented a super balance and now it is worth almost US$2 billion.”
Bano highlighted that Nvidia increased its earnings per share by 765% year-on-year, that is, the company earned seven times more this year than in 2023, as seen in the net result. Then, he said, “justifies it being worth 7 times more”. She also assured that the expectations were strong and even so, she exceeded them. “It was expected to be US$4.64 and it was US$5.15 per share; it was expected to have revenues of US$20.6 billion and it had US$22.1 billion, so exceeded expectations, although they were high“he added.
Nvidia: are we facing a bubble?
Emilce Cordovadirector at Bell Stock Marketin dialogue with Ambitexpressed that “Nvidia surprises and continues to surprise and, although it may be considered expensive for many analysts, it continues to validate the rise”. When asked if it could be close to a phenomenon similar to what happened with .coms in the 2000s, where there was a financial bubble, he said that He thinks not, but it could be close.
“Despite this, the market validates each balance the price and the rise. All this responds to the demand, which is increasing. Today it became the main supplier and reflects it in the price,” added the expert. And she closed: “It is likely that this bubble will arrive this year. Are there similarities with previous bubbles? Yes, there are, but only time will give us the answer. “We must be attentive and not let ourselves be dominated by greed.”
To its turn, Bathroom said that one of the evaluation ratios of a company is the Price Earning Ratio or PER Ratiowhich is dividing the market capitalization of a company by its net profit: “It could have 30% or 40% but it doesn’t have 100%. That is saying that it is very expensive and the PER or other ratios They say that it is overvalued, but what happens is that it is a company that does not stop growing, which may be justifying everything”.
What reading of the balance did the market make?
For the financial multinational Goldman Sachs, Nvidia met what was apparently a very high bar: “In the short term, we will see a series of new products and presentations, including the H200 (i.e. capable of performing twice the inference performance vs. H100), Spectrum-X (i.e. Ethernet-based AI Network Solution) and B100 (next-generation data center). All this, in a context of solid demand.”
Goldman Sachstherefore, increased its non-GAAP (excluding SBC) EPS estimates for fiscal year 2025/26 by 8%, and reiterated Buy rating with updated 12-month price target of $875 (versus $800 before), which represents a potential increase of 19%.
For its part, for Morgan Stanley, “The numbers were very good.” “We have never seen more than $2 billion in quarterly growth”. They also reported increased estimates for April quarter revenue from $22,793 million to $24,076 million and non-GAAP earnings per share (not based on pure accounting, but also expectations) of $5.20. au$s5.45.
To its turn, Bofa SECURITIEShighlighted the positive aspects of the company such as general supply shortages, low dependence on China, and increasing demand for AI, among others. Overall, fiscal 2024-2025 earnings per share increased by +13%/15%, compared to before, from $23.11 to $29.59.
“As Nvidia does, so does the world”quipped Jack Janasiewicz, chief portfolio strategist at Natixis Investment Managers Solutions. Janasiewz highlighted that Nvidia’s results exceeded market expectations, showing skeptics that there is plenty of juice left in the AI market after the recent rebound. “When should we sell? There may still be room, and I’m content to sit and wait”he concluded.
Source: Ambito
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