The big news this week was that ’s second-quarter sales rose 55.6% to $46.74 billion compared to $30.04 billion in the same quarter a year ago.
Interestingly, Nvidia stated that there were no H20 sales to China-based customers in the second quarter. However, the company benefited from a $180 million release of previously reserved H20 inventory, from approximately $650 million in unrestricted H20 sales to a customer outside of China. Nvidia guidance excluded any H20 chip sales to China, so that apparently weighted on the stock in aftermarket trading.
Due to all the call options written on Nvidia (so market makers can collect option premiums), the stock does not often rally in the wake of its earnings, since sometimes market makers run “mean reversion algorithms” to prevent them from exercising all the call options issued.
Nvidia now has a market capitalization that accounts for 3.6% of global GDP, according to Deutsche Bank. Furthermore, according to Deutsche Bank, Nvidia’s market capitalization is now bigger than the entire stock market capitalizations of Britain, France and Germany. Only China, India and Japan have stock market capitalizations larger than Nvidia. So, it is very apparent that Nvidia is overpowering the world with its market dominance of AI chips that data centers increasingly demand for all the AI applications.
Regardless of how the AI race unfolds, we are poised to profit via Nvidia and all the data center-related stocks that I recommend, such as AGX, EME, FIX, GEV, PWR, PSIX, and VRT.
is probably implementing AI better than most companies as it strives to revamp the U.S. Defense Department, the CIA, NSA, and other federal agencies. The stock has been attracting the attention of short sellers, but I suspect it will “squeeze the shorts” when it announces its next quarterly results. In the past month, the analyst community has revised their consensus earnings estimate 21.4% higher. Of course, typically, positive analysts’ earnings revisions precede future earnings surprises, so I remain very optimistic that Palantir Technologies will resurge in the upcoming months.
Overall, we are now in a brave new world where our standard of living is increasingly dependent on AI enhancing productivity to boost GDP growth. In the next several years, AI will continue to invade our lives, and self-driving vehicles will likely become increasingly common. Our home assistant robots are likely more than a decade away, and the adoption rate will likely be slow at first. Right now, robots are dominating warehousing as well as the factory floor to help boost productivity. These productivity gains help to reduce inflationary pressures due to a stronger U.S. dollar.