NVDA

Alert: Changes to the Newsletter Portfolios

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Image Source: Mike Cohen cc by 2.0. Summary Best Ideas Newsletter portfolio Pepsi (PEP): 4%-6% à 0% McDonald’s (MCD): 4%-6% à 0% Amazon (AMZN): 0% à 4%-6% Nvidia (NVDA): 0% à 4%-6% Dividend Growth Newsletter portfolio Honeywell (HON): 3%-4% à 0% McDonald’s (MCD): 3%-4% à 0% Meta Platforms (META): 0% à 3%-4% Booking Holdings (BKNG): 0% à 3%-4% By Brian Nelson, CFA 2024 proved to be a great year for stock investors. The Dow Jones Industrial Average ETF Trust (DIA) has advanced nearly 15% year-to-date on a price-only basis, while the SPDR S&P 500 ETF Trust (SPY) is up a whopping 25%+ on a price-only basis. The Invesco QQQ Trust (QQQ) is up even more at a 27% advance in … Read more

Nvidia’s Gross Margins Facing Pressure But Still Very Healthy

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Image: Nvidia’s shares have surged higher in recent years. By Brian Nelson, CFA Nvidia (NVDA) reported better than expected fiscal third quarter 2025 results on November 20 with both revenue and non-GAAP earnings per share coming in ahead of forecasts. Revenue was up 94% on a year-over-year basis in the quarter, while Data Center revenue was up 112%. Both were quarterly records. Nvidia’s non-GAAP gross margin of 75% in the quarter was unchanged from the same period a year ago. Non-GAAP operating margin was 66.3% in the quarter, up from 63.8% in the prior-year period. Non-GAAP earnings per share was $0.81 in the quarter, more than doubling from last year’s mark and beating consensus by $0.06. CEO Jensen Huang had … Read more

Taiwan Semiconductor Benefiting from Strong Smartphone and AI Demand

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Image: Taiwan Semiconductor released better than expected results. By Brian Nelson, CFA Taiwan Semiconductor (TSM) reported excellent third quarter results on October 17. In the quarter, consolidated revenue came in at NT$759.69 billion, net income was NT$325.26 billion while diluted earnings per share was NT$12.54 (US$1.94 per ADR unit), all coming in ahead of expectations. On a year over year basis, revenue grew 39%, while net income and diluted earnings per share increased 54.2%. On a sequential basis, revenue advanced 12.8%, while net income leapt 31.2% higher. Return on equity was 33.4% in the quarter, up 7.6 percentage points on a year-over-year basis. On a US-dollar basis, third quarter revenue of $23.5 billion advanced 36% year-over-year, ahead of guidance calling … Read more

Brain Teaser – Reflexive versus Reflective

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Dear members: — Jason Zweig of the Wall Street Journal, wrote in his pioneering text, Your Money and Your Brain, a few fun examples of how sometimes the psychological process of anchoring and adjustment can trip us up. — In one notable example, Zweig wrote about how two psychologists Amos Tversky and Daniel Kahneman had asked volunteers to spin a wheel of fortune numbered from 0 to 100. The contestants didn’t know that the wheel was rigged to produce either a 10 or a 65 for the experiment. — After spinning the wheel, the contestants were then asked whether the percentage of total United Nations membership made up of countries in Africa was higher or lower than the number that came up. … Read more

Nvidia Beats Second Quarter Estimates

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Image: Nvidia’s shares have been on a tear the past year. By Brian Nelson, CFA On August 28, Nvidia (NVDA) reported better than expected second quarter fiscal 2025 results, but the performance wasn’t strong enough for the market to bid up shares. Revenue of $30.04 billion was nonetheless up a whopping 122% on a year-over-year basis, while quarterly non-GAAP earnings per share came in at $0.68, up 152% from the year-ago period. Its GAAP gross and operating margin was 75.1% and 62.1% in the quarter, respectively. In addition to record quarterly revenue and outsized levels of profitability, Nvidia posted record quarterly Data Center revenue, which advanced 154% in the second quarter from the same period a year ago. Second quarter … Read more

Paper: Value and Momentum Within Stocks, Too

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Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more

Nvidia Remains a Free Cash Flow Generating Powerhouse

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Image: Nvidia’s first-quarter fiscal 2025 results delivered, and the company remains a Wall Street darling of a stock. By Brian Nelson, CFA All eyes were on Nvidia’s (NVDA) first quarter fiscal 2025 results after the close May 22. The company put up record quarterly revenue of $26 billion in the quarter, which beat the consensus forecast, up 262% from the same period a year-ago. The company’s Data Center revenue came in at $22.6 billion, which also came in better than expectations, up 427% from last year’s quarter. The results were good enough to propel Nvidia’s shares higher following the quarterly report. Founder and CEO Jensen Huang had the following to say about the company’s bright prospects: The next industrial revolution … Read more

Micron Issues Strong Outlook, Points to Multi-Year Opportunity in AI

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Image Source: Micron By Brian Nelson, CFA On March 20, Micron (MU) reported better than expected second quarter fiscal 2024 results that showed considerable revenue growth and a nice beat with respect to non-GAAP earnings per share. Revenue advanced to $5.82 billion versus $3.69 billion in the same period last year, while non-GAAP net income swung into positive territory at $0.42 per share, up from a loss of $1.91 during the second quarter of fiscal 2023. Operating cash flow surged to $1.22 billion in the quarter from $343 million in the same period a year ago. Here’s what management had to say about the performance in the quarterly press release: Micron delivered fiscal Q2 results with revenue, gross margin and … Read more

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?

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Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. By Brian Nelson, CFA We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key … Read more

Market Darling Nvidia Delivers in Fiscal Fourth Quarter

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Image: Nvidia has been a market darling, and the company did not disappoint in its fourth-quarter fiscal 2024 report. By Brian Nelson, CFA Nvidia (NVDA) reported fantastic fourth-quarter fiscal 2024 results on February 21 that handily beat the consensus forecast for both the top and bottom lines. Shares of Nvidia have surged since the beginning of 2023, and the quarterly report and outlook for the first quarter fiscal 2025 pleased even the most cautious investors. We believe that the market is still in the very early innings of investment into artificial intelligence [AI], and Nvidia has the lead when it comes to advanced chipmaking. The high end of our fair value estimate range of Nvidia stands north of $800 per … Read more