The Truth About NVIDIA's Earnings: What Investors Need to Know

Hey there, VV Nation. Exciting night. Nvidia just reported earnings last night and today we're going to take a look at a few different things. Number one, we're going to dive into the numbers and see if Nvidia is the right company to own. Number two, we're then going to see, oh, I got all these notes. Number two, we're going to see is this the right time to be buying Nvidia? And then number three, if you do buy it, we're going to talk about how would you be managing that position after you buy it. And plus, if you stick to the end, what we'll do is we're going to take a look at how to find other stocks that are in the AI space that uh you might consider buying as well. So, let's get to it. All right, let's start with the company itself and dive into the numbers that they reported last night. So here right from Nvidia's website invi Nvidia excuse me reported revenue of $96 billion uh for the quarter that is up 106% from a year ago and just kind of think about that number for a second 96 billion. Okay, it so it's already one of the biggest companies in the world and they still more than doubled from last year, right? So they they more than doubled their revenue year-over-year. And like I said, think about that number. 96 billion. That is 96,000 million. 96,000 million. There's only a handful of companies that are in that territory. All right. So, it's huge. A couple of things to note from their report. All right. So, I'm going to scroll down here and we can see here the CEO. Some of the things the CEO said was that AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue. And here's a key thing. Demand is accelerating. All right. So that's one of the key things we were looking for in this report like what what are we looking at towards the future not just for Nvidia but in that entire space because Nvidia is basically one of the biggest things driving this space. So the CEO is saying demand is accelerating. All right that's one of the key things. Additionally, if we scroll down, they expect there it is. Revenue is expected to be 108 billion plus or minus 2% next quarter. All right, for the third quarter. So, another increase. They're expecting growth next quarter. And here's a thing that you might sneak by. Nvidia is not assuming any data center compute revenue from China in its outlook. So anything from China, the revenue from China for this would just be like icing on the cake. So there's considering growth even without that. All right. Now, if you're not, as an investor, if you're not an expert at analyzing basically all this the financial statements that you see here, that's fine. Neither am I. That's why I leverage off of a tool called Vectorvest. So, what I want to do, let's hop into Vectorve Rest and take a look at the analysis of Nvidia from a different perspective and one that our members say is a lot simpler. Okay, so let's hop over there. All right, here we are in VectorVest. And before we even look at a chart, I I want to show you one of the things that our members really like about Vectorvest. And that's how much information that we take and we simplify. We actually take data, a lot of data, and we simplify it into useful information in this one little row that you see here. So, as I'm recording this, it's pre-market. Uh we could already see that Nvidia is up 6% pre-market. We'll talk more about that a little bit, but there's a lot of proprietary information that comes after it that let's talk about. So, Nvidia as a company, we see the price, but we calculate a value for it. The value is 336. So, it is way undervalued. Now, when we're talking about value, that's what we feel the company is currently worth. And first off, it's one of the few companies in this space that is undervalued. There's so many other companies that are way over their value right now that are trading at a premium. Nvidia is not one of them. It is still undervalued. Now, when we're calculating value, we're looking at things like earnings, earnings, growth rate, sales, profitability, things like that, but we're comparing it to things like inflation and interest rates. And because those are the thing, the bad things that pull down a company. And we want to make sure the good things are outweighing the bad. Nvidia must be doing that really well because it is undervalued right now. So that's step one. Then the next few indicators over here are on a 0ero to2 scale. Uh this one here is called relative value. 1.79 is one of the highest in the database. And what is that telling us? So relative value is saying a comparison of this stock to an investment in a bond. A number of 1.79 is saying that an investment in Nvidia has the potential to outperform a bond by 79% over the next few years. That's huge. Then we come to relative safety. There's the things that we consider there among other things are like how long the company's been around, the price volatility, um debt to equity ratio, but one of the biggest things we factor in there is the consistency and predictability of the company's financials. 1.47, believe it or not, is one of the highest numbers in our database for safety. Uh so it's a it's saying it is much safer than the average stock that we track right now, and that is over 9,000 here in the US. Then we come to RT which is the price trend. So it's in an uptrend right now. And I'm going to slide over here to earnings growth rate. So it is growing its earnings at 38% per year. All right. And plus even our EPS that is a forecasted EPS. Now I do want to make one thing clear. The earnings just got reported by Nvidia last night. So these numbers, our proprietary formulas will be updated uh tonight uh in in our data based on the numbers from Nvidia. I don't foresee the proprietary numbers like value RV and RS changing dramatically and you'll see why I I can I say that when we look at the graph, but uh these numbers right now uh based on the earnings that we we we just looked at, I'm guessing will probably improve, but I don't want to predict. But uh already these numbers are great, right? So as a company there's a lot of things to like. Okay, but there's a lot of great companies out there that investors buy at the wrong time. So let's now shift gears a little bit and say, "All right, we got a great company. Is it the right time to buy?" Okay, so let's hop for that. Let's hop over into a graph and take a look at that. Oh, before we take a look at the graph, I do want to mention if you do want to get an analysis of Nvidia or any other company, we do have a free stock analysis that you could do. I'll put a link into the chat. Uh you can get all this data for any stock that you want. Just use the link below. Or if you're like me and you just like to use the software. There's also a link in the comments for uh a 30-day trial, so you can check it out and do an analysis on a ton of stocks if you want. All right, so now let's go take a look at a graph of Nvidia. All right, here we are in a vector s graph of Nvidia. And there's three things I want to talk about as far as timing. Number one, don't chase, especially after earnings. So, we're going to talk about not chasing a stock after earnings. Number two, we're going to make sure that Nvidia as a stock is going up when we buy it. And number three, and this is a big one that a lot of people forget about because a lot of people aren't taught to look at this, and that's make sure the market as a whole is moving up. So those are the big three. All right, so first off, I do want to cover visually what we just talked about. So here's a one-year look at Nvidia. I put on a graph our forecasted EPS. I mean, look at that. This is picture perfect what you want to see. Uh this is like we call it the flashlight into the future earnings because this is a one-year forecast for Vector where we take historical earnings, current earnings, analyst forecasts. We put it all together into a formula and say, "All right, what do we feel is the a 12-month forecast." And you can see this is exactly what you want to see. Earnings continually rising growth. That's earnings growth right here, especially for a company as big as Nvidia. to still be growing their earnings at 38%. That's incredible. And here's a one that we didn't talk about yet. Sales growth 85%. Right? To still be able to grow their sales uh by 85%. Now, if we look at longer term, I'm just going to do 10 years. And for that, I'm actually going to have to switch over to log scale. I mean, a 10-year chart of Nvidia, you can see why a lot of people love investing in Nvidia for the longer term. A lot of people just say just buy and hold it. We'll talk more about that in a bit. But look at the earnings per share really starting to take off over the last few years, especially with the AI uh becoming hot. Earnings growth has remained strong. Sales growth strong. So, this is a visual of what we were just talking about a moment ago. Let's bring it back down to one year. And what I'm going to do, I'm going to put on the earnings dates uh over the past several quarters and I'll expand it out. The first thing we wanted to talk about is not to chase. Uh so our tips here at Vectorvest are number one, don't buy a stock leading into earnings. It's just a volatility thing event I should say. So we say avoid buying right before earnings. And we usually say let things settle down after the earnings and kind of see where things go. You can see after several earnings actually Nvidia after right after earnings fell a good number of times. So that one it fell. This one it actually went up. Actually the day after it went down and then it resumed. This one it went down and then resumed up. A pop but then a reversed during the day. So the best thing that we feel is to let things settle down. Let the dust settle. Don't chase. Okay? Especially you see today there's a big gap up. But there if I zoom in on this one here, there was a big gap up after earnings and it filled. So what today brings we don't know yet. But number one, don't chase. That's uh tip number one as far as is it the right time to buy. So great company. One tip from us is don't chase. Number two, we want to make sure that Nvidia is actually going up. One indicator that we have, if I take off earnings and earnings growth and sales growth was that RT indicator, that is a short-term price trend. So now that's back above one. So that's great. But for those those technicians out there, we're still in the middle of all this chop right now. All right. So, we've got a strong area of Let me take off earnings. Bring it back down to one year. We've got a couple of strong areas of resistance here. And yeah, we got one up here and a couple of lines here. But if I visually draw just a horizontal line, you know, we've got this area in here. So, it's a zone. It's not an exact price, but if I say right here, there's a lot of resistance. So, former owners, former buyers of Nvidia who may have bought it on this gap and then it fell and they might be saying, "If it ever gets back up to there, I'll sell it." So, there's some selling pressure here, over here, and over here. So, that's up to you, but one thing you could do is wait for it to clear that because I mean, if it clears that, you remember that long-term graph that we looked at just a moment ago. Once it clears areas of resistance, we had a zone of resistance here. Cleared it. It went higher. And we could zoom this back out. Other times, here's an area of resistance. Doesn't look as much now because so much time has gone by. Once it cleared it, it took off. Here's an area where there was some resistance. Cleared it. It went higher. I mean, we can see this over and over again. So number two is we want to make sure that Nvidia is also in an uptrend and ideally clear of resistance. And then number three, which we're I'm not going to have a visual for this one, but we want to make sure that the market is in an uptrend. Vectorvest has tools inside of it or signals uh that show what trend we are in the market. Uh our members subscribe to our software to get that data. So, I'm not going to show it up on the screen uh because we got a bunch of people paying for that specific information. Uh but right, we make it very simple. Right on our homepage, we give lights like green, yellow, red, letting you know, is it safe to be buying stocks at that time. All right, so those are the three big things. Don't chase. Make sure Nvidia is in an uptrend. And number three, make sure the market is in an uptrend when you buy. All right, so those uh that covers section two, which is is it the right time to buy a good company like Nvidia? All right, the third big part. I know I'm going kind of quick. I'm trying to go as quick as I can. What is your plan when you own it? All right, I got still got all these notes to cover with you today. All right, so what is your plan once you own it? And this is one thing that we've talked about in a lot of our coaches panels. Hopefully, you've been watching those as well. There's a couple of different main trades that people do. Is it a short-term swing trade or is it an investment? And you could do both, right? You could have it in a long-term portfolio and you could also have another portfolio where you you swing trade stocks like Nvidia and where you're in and out a little bit more. That's fine. But before you place hit the buy button, you need to decide which one's which because you're going to manage them differently. All right. So, if you are buying it for the longer term, we saw if I let me cover that one first. If we're looking at that 10-year chart of Nvidia, that's fine. It's a great long-term investment. We've said this for probably going on a decade now. If I pull this way back, I mean, look at the chart of Nvidia. It's hard to argue that it's not a great long-term investment, but you still want to have ways that you manage it. And yes, you could buy and hold a stock, but there are times where good stocks, they're not immune to the market. I mean, you see here, for an entire year, I think this was uh 2022, for an entire year, Nvidia went down. All right. Over here it dropped. Over here it dropped. So some of the things if you're a long-term investor, things to consider would be learn how to buy puts as an insurance policy. Now on a high price stock, puts could be a little expensive. So what the other thing that we teach is doing a collar where you to in order to pay for the put, you sell a call above it. Now, in order to do that, you'd have a 100 shares of Nvidia, but it's a we call it lowcost insurance uh to do a thing called a collar. I'm not going to teach that today. Those are things for you to consider. Uh the other thing to consider if it's not a super long term would be make sure your stop gives it enough room to breathe. Uh so, if I put up back on the one-year chart, one of the things that we use is our vectorve vest stop. And you can see right now it's kind of hovering right around this area of support. So one thing you could consider is all right if this is a longerterm position. Uh I need to manage it and give it enough room to breathe. But if it breaks down below here it's basically telling me hey the something is wrong. All right. I could exit this and then I you could always re-enter it. All right. But you got to make these decisions in advance. Now, if you are a a swing trader thinking about getting into Nvidia, you'd probably have a tighter stop. You might say, "All right, well, uh, I'm going to use the sometimes you might use the lowest low of the last two days, but then you see that this one right over here is just a smidge lower." So, you might say, "All right, well, if it goes below that, it's probably going to fall all the way down to this level of support, then I'm out." But the key thing is make sure you decide what kind of trade this is from the beginning regardless of which one you pick. You need to have management rules in place, but also buy the right number of shares. I'll there's a a video that we did a while back uh well not that long ago earlier this year where I talked about all about position sizing. I'll put a link to that in the chat. Just make sure that the number of shares that you buy ensures that if the stock price falls and hits your stop that the dollar loss on that trade is no more than 1% or 1 to 2% of your total portfolio. All right, I'll link to that video. I really recommend checking out. There's also a free GPT that in that the description of that video that helps you do all the math that you just type in the numbers and it figures it all out for you on how many shares to buy. Okay. So, let me look down at my notes. Make sure we covered the that part. Don't chase. Make sure the stock is going up. Make sure the market's going up. And then we talked about what is your plan once you own it. Uh we talked about the short-term trade. Uh we talked about uh the long-term investment and things to consider there. Okay. The next big thing is let's look beyond Nvidia. Right. All right. So, we already talked it great company. We want to make sure we buy it at the right time, but it's not the only stock. We're not saying you should have one stock in your portfolio, right? You don't want to have your portfolio driven by one stock. You want to diversify. So, there's the AI space has gotten pretty big. And if you're some of you remember, you're as old as I am, you remember the dot phase. It's almost like every company put.com in their name just to so the people investors are start buying these things. So a lot of companies out there are just throwing AI in their name to get caught up in the enthusiasm. You want to be able to pick out the best ones. So let me close this graph and I'm going to open up a watch list that we put together of about 140 companies. Let me show it to you right now. All right. So if you're using Vectravest, now I'm going to hide the names because again our members are paying for this analysis. We put together a list of 140 companies that are in the AI stock space that that realm and you could do the same analysis that we just did on Nvidia. So, we've got the company name and symbol and they are all automatically ranked by our master indicator VST which is a combination of their value, their safety and their timing. But you can look over here and you can compare uh their prices to their value and you can see which ones are undervalued. And I'm going to I will highlight one this one right here. That's where Nvidia is. It's there's it's actually number three in this list. So that means there's two that have higher numbers than Nvidia. So we got Nvidia here in third place, but you can look at other companies. Look at their upside potential. That's RV. And you can see there's a lot of stocks up here at the top with high upside. A lot of nice relative safeties timing. Look at the growth rates in these. But so those will appear at the top. Now, of course, if I resorted it and found saw the ones at the bottom, you're going to see a different picture. So, that's the benefit of doing this type of analysis. And like I said earlier, our members really like coming in here and getting information, usable, valuable information very quickly. So, you don't have to dig through earnings reports of every AI company that's out there or just by, you know, just the big names. You could figure out, all right, well, I've got some really great choices in here. Then you could pull up the graphs of them and see, all right, do they have rising earnings? Do they have rising earnings growth? Do they have rising sales growth? How's the price looking? You can go through all that. We got a great list right here. Again, I'll put a link if you want to. If you just take out a 30-day trial, you can immediately get this information on your first day. All right, so today if you want to. Okay, so let's close with this. Let's do a quick recap. Should you buy Nvidia right now? Let's go back to the three main questions that we talked about at the beginning. Is it the right company? I mean, it's hard to say that there's going to be better companies out there. I mean, it's got a lot of things going for it. So, is it a good company? Yes. The biggest thing is you want to make sure you buy it at the right time. So, we talked about not chasing. We talked about um making sure the stock is in an uptrend and break breaking through resistance ideally. And number three, um, the market. Sorry, how could I almost forget that one? The market is a big one. You want to make sure the market is in an uptrend because if the market's coming down, it's like the tide. It's going to if the tide's going out, all ships sink, even the good ones. All right, so those are the three big ones. Plus, the other thing we talked about is, hey, there's other companies other than Nvidia. And here's the list right here. All right, so with that, if you do want to take out a trial of Vectors, there's a link in the chat. If you just want to get a stock analysis of your favorite AI company or your favorite whatever company, use the link in the chat for that. There's a couple other videos I'll link in the chat as well that I think will be very informative for you. We've got one that talks about RV RS RT value specifically. I'll link to that in the chat as well. Other than that, wish you the best of luck. The market's about to open. Hopefully we can get this video out as soon as possible and I will see you in the next video, God willing. All right, take care. Bye everybody.