14 straight beats. Nvidia's stock fell after the last 4.

Strong earnings reports haven't been too kind to Nvidia's stock of late. >> I don't envy Jensen's position right now. >> 14 consecutive quarters of earnings beats. What does the company need to say on a Wednesday to keep that going? If they beat, that's great. But is that enough for the street to say things are great, we're doing well here? >> It may not be enough depending on what the tone is like from Jensen Wong, what the guidance looks like. I think a lot of investors are rightfully worried about the massive amounts of money that has been spent and will continue to be spent by their hyperscaler customers on AI and what the inevitable payoff will be because even now some of the mag seven companies that are cashri are going free cash flow negative to fund the spending. It's not just Oracle anymore. or was for a time where it's like, oh that's just an Oracle problem. >> It's just Larry Ellison. >> Yeah, exactly. But now there are many other companies in big tech that are also spending in a somewhat proflegate manner and there are still questions about what the ultimate AI payoff will be. So I think Nvidia probably it's going to be more less about the numbers maybe because we know they're going to beat I'm setting myself up watch they miss. >> Right. Setting yourself up for disappointment. >> Yes. Exactly. But Nvidia historically beats I think we just need to see how the guidance looks like and just how confident Jensen Wong sounds about the future. Nvidia shares a fall in response to earnings in six of the past eight quarters including the last four per Yahoo Finance Alpha Space analysis. Love Alphaspace. The reality is that the market is positioned for the company to post something great and for CEO Jensen Wong to sound super bullish on the earnings call. Should the average investor out there just ignore the market reaction to these Nvidia earnings? And I bring this up because this company is still crushing on the top and bottom line. We're going to have this discussion three, six, uh, I don't know, 12 months from now, and it's still going to be the same discussion. They're crushing it on the top and bottom lines. >> Yeah, it's such a great point. And the reaction function may be a bit easier this go around because it's about 10% below its all-time high. It's trading at 20 times 21 times next 12 months, which will likely go down to 18 times after they raise their guidance. They'll likely do way more than the 92 billion that's expected in revenues. And clearly, they'll continue to have 75% margin. So, if you're going to play this stock as a long-term investor, because of the, you know, its earnings report, it's probably a mistake. It's it's it's a great stock to have in your portfolio trading at a very reasonable multiple and growing its earnings and its revenues and its gross margins at a tremendous pace. So I think the reaction to you as a long-term investor is to ignore the noise around this and just understand it's one of the greatest companies and sits at the center of the artificial intelligence revolution. >> Why does Nvidia ch trade uh at these types of lower valuations compared to others in tech? It almost doesn't make any sense. >> Well, it doesn't make any sense. I think there is some concern about what they're using their balance sheet for and how much vendor financing they're doing with some of the largest clients. Then there also is some concern that perhaps one of the large language model builders will eventually drop out of this race and instead of having five or six we'll have three or four large language model builders and there will be less demand for invid Nvidia products. So I think it's that the concern that perhaps AMD comes out with something that's good enough in its next generation. So there's always been that concern but you know I think in real time looking at a company the magnitude of Nvidia trading at a S&P multiple is probably one of the the most ridiculous things you can think of. I don't envy Jensen's position right now because I think right now you're clearly seeing the market tell everyone that the capex is peaking this year and it's going to essentially go lower and lower as year as open model gains momentum and as time goes on. But all Nvidia and Jensen can do is show up every single quarter and prove that they're physically shipping more and more of their product and that's going to result in a lot more revenue. I think right now we're anticipating $95 billion this quarter. They're probably going to guide somewhere around 110 billion for the following quarter. If they can do that while maintaining margins at 75%. That tells me that they can put up this kind of growth while keeping margin at this level that their customers are still willing to pay the premium that Nvidia has to offer, which shows that there is no easing supply constraints at all. But I will say though, the next thing I'm watching specifically for Nvidia is demand needs to widen out a bit. I think you're seeing Nvidia start communicating to everyone the differences between their hyperscaler demand and their um ACIE is what they call it the companies outside the hyperscalers because that is where the next leg of this rerating on the stock is going to come from because everyone's just kind of poking holes in the Nvidia story that the hyperscalers are going to slow down their capex. They're creating their own custom silicon chips. AMD is becoming a competitor. But if this separate group, the ACIE can actually maintain triple digit growth and continue showing a lot of momentum over time that has a lot of momentum to where Jensen can kind of pass a baton off to this brand new group of demand pool, then the market finally can maybe stop arguing uh against why they deserve an undermarket multiple. And also don't don't uh call out SpaceX as well. Like that's a large part of where the demand's going to go in next year or two. I mean, right now SpaceX is around 4% of the revenue for uh Nvidia. I wouldn't be surprised seeing that over 10% next year, especially when you heard Elon talk about that planned compute buildout that he's anticipating by 2027.