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do you buy Nvidia stock before or after the announced 10 for one stock split is the company doing enough in the upcoming quarters to keep the rapid performance that this stock has seen over the last year over just the past couple of months and certainly over the past 5 years can Nvidia continue to put up numbers that beat Wall Street expectations and estimates and continue to see shares go higher and higher how were the q1 numbers compared to last year certainly and even just a quarter ago and how does the stock look from a technical perspective after announcing the q1 numbers after the battle we got a lot of questions and a lot of answers to get to when it comes to Nvidia what is going on investors hopefully you guys are doing well out there it's that time of year we only got four cracks at this and we've got a big one today Invidia Corporation ticker symbol nvda some people might even say this is one of the most important stocks maybe the most important stock in the stock market so we got a lot to talk about over the last year Shares are up 25% that's impressive I think even more impressive than that if you rewind time little less than six months ago well after chat GPT well after it's known Nvidia is the Michael Jordan of the GPU AI Data Center business Shares are still up nearly 100% you stretch this thing out to 5 years and 10 years and I mean I mean I tell you what there's not much to dislike company announced a 10 for one stock split so we'll get to that right away since there'll be some maybe newer investors or retail investors that maybe don't understand how a stock split works or might be wondering if they should wait to buy until after the stock split which goes into effect June 7th essentially what will happen is let's assume Nvidia shares will round this up to $950 if you were to buy Nvidia shares today and you wanted to buy one single share you would had to reach into your buet and pull out $950 now if the 10 for one stock split happens tomorrow inside of your account instead of having one share worth $950 you would have 10 shares of Nvidia but you would have to take this $950 and divide it by 10 so each share would be worth $95 so essentially you'd have the exact same amount of money invested in Nvidia yesterday and after the stock split the only way stock splits really impact the stock price or impact if your decision if you think you should buy now or in the future is one if you have a brokerage account where you're not allowed fractional share investing certainly pulling out $1,000 to buy a single share of Nvidia right now you might wait because that single share is only going to cost you maybe $100 in the future those of you that trade options there will be some impact in terms of the price of options as the price of Nvidia will also go down after the stock split what is really going to drive Nvidia into the future certainly over the next 12 to 24 months as we've got a massive $2.3 trillion valuation there's not many companies that are worth more than Nvidia at the current time for this company to surpass essentially just Microsoft left on the list maybe apple and a few others for it to do that it has to put up great great earnings and that is what the company has been doing over the past year they also announced a dividend increase by 150% up to 10 cents per share that's obviously ra rather negligible if you look at it but this could turn into one of the great dividend growth stories of all time if they continue to raise the dividend by this much every single year now the q1 revenues are spectacular $26 billion that beat Expectations by about $1.5 billion that was 262 growth year over over a year but here's the deal and thing to understand with Nvidia the expectations have been ratcheted up very much over the past 12 months this time last year Wall Street was expecting right around 15 billion yeah $5 billion worth of Revenue and I just told you the company put up $26 billion but it beat Expectations by only $1.5 billion you're going to wonder well why is that so well that's because Wall Street over the last year has just been w ratcheting up the revenue estimates from $15 billion all the way to 30 so just keep that in mind when Nvidia reports it's saying it only beat Expectations by 1.45 billion no it actually beat expectations if you rewind time a year ago by like $15 billion so that is how Nvidia keeps the party train rolling is if we start to look out not just next quarter which we'll talk about but if we start looking out a year from now the ex expectations right this second for NVIDIA are $32 billion if you believe that Nvidia has its shot to get to 38 billion 40 billion certainly if we look forward and they can double revenues again up to 50 $60 billion you absolutely can almost guarantee that you going to have fantastic stock performance from this company could it go up 200% could it go up 100% that is prob likely if you believe again you have to believe that these expectations as we move into 12 months later and this is what the stock market is all about it's not about this quarter it's very little about next quarter it's more about next year can you forward project on Nvidia $32 billion next year Well I tell you what if they come in at $32 billion Shares are probably pretty fairly valued now and the stock will perform relatively well but you won't have dramatic outperformance where where you'll get dramatic outperformance going forward with Nvidia and how this surges to potentially the most valuable company in the world is if we can turn $32 billion in q1 Revenue next year into 40 or higher certainly anything north of 40 will likely take this company easily into the $3 trillion market cap and we'll talk about that here more in a moment now we got Q2 Outlook as well as they continue to not only beat the revised up expectations but they're also beating the revised up Q2 Outlook as well so we just reported q1 we'll get into those numbers more here in a moment but we got Q2 guidance as well expected to be about $28 billion the consensus estimate was for 26.8 4 the high end was 292 so they're slightly underneath the high-end but just understand the game most of you guys realize this company plays they're going to set the bar at $28 billion with the idea that they'll come over that they say plus or minus 2% but it's probably closer to 10% they're probably internally at Nvidia trying to get their sales people and their sales north of 30 billion in the most upcoming quarter if they're able to do that well shares should maintain at least the level or right around the levels that they're at you start looking out to Q3 well if Q2 is going to be 2930 billion by the time we get black Wells I think it's sometime in Q3 potentially even Q4 certainly could we push these revenues significantly higher than the low3s that's certainly on the table and certainly a possibility one thing that you have to keep in mind is we start to lap really good performance with Nvidia so instead of 200% growth 100% growth we'll come back down to earth just a little bit and start doing 60 50 30% growth but if you're able to again that's the expectations if Nvidia is able to re accelerate these expectations that is where the upside certainly is going to come with the stock and obviously the estimates on the revenue side and the profit side will just have to continue I mean this is a beautiful graph if your expectation graph is looking like this your share price is probably looking exactly like Nvidia has over the last year now what is keeping this stock just continuing to move higher is not just the revenue growth which year-over-year went from just $7.2 billion last year all the way up to $26 billion even last quarter it was2 $2 billion so we bolted on almost $4 billion worth of Revenue even more impressive than that are the gross margins I tell you what suppliers TSM everybody supplying this company SK hyx is probably looking at these gross margins and thinking to theel well maybe we can raise prices over on at Nvidia because oh my gosh look at your gross margins last year they were 64.6% and they've skyrocketed to 78.4% I don't care what you're doing you could be selling perfume you could be selling luxury goods you could be selling software 78.4% gross margins are in incredible certainly in the chip business last quarter they were at 76% and we love that seeing massive gross on that gross margin so Nvidia if again your recipe for the stock to continue to outperform and potentially become the most valuable in the world is in q1 of next year I think they need north of $40 billion worth of Revenue and these margins need to be in this kind of mid 70s High 70% range and you can almost guarantee that this company will be in the conversation of the most valuable in the world operating expenses have basically gone nowhere certainly over the last year you went from 2.5 up to 3.5 but on $20 billion more of growth or $19 billion more of growth you'd expect some operating expenses to increase we'll get to more of those here in a second now what's really impressive is the data center growth look at last year and look this is when Nvidia popped off from a stock perspective $4.3 billion worth of Revenue all the way up to 22.5 on that data center the gaming business is still holding up very nicely albeit we're down sequentially kind of quarter over quarter on this one still holding up nicely the rest of the business units are so small off of $26 billion worth of Revenue they basically don't do anything now we have this $26 billion worth of Revenue cost of Revenue at $5.6 billion that gave you gross profit of $2.4 billion last year was just 4.7 billion and this is what's so impressive about this company and this is why this company in particular has a chance to become the most valuable in the world because look at your research development over the last year I mean we're talking 200% growth on the revenue side and your R&D expenses went from 1.9 up to just 2.7 look at your selling General administrative expenses again 200% Revenue growth and you went from 630 3 to just 777 primarily because the products sell themselves look at your total operating expenses from 25 up less than a billion dollars to 35 that is I mean you just don't see this almost ever with any company operating income went from 2 billion up to nearly $17 billion net income from 2 billion up to 15 I I don't care if you're selling dog manure or AI chips if you do these types of financials over the last year your stock a bare minimum is going to be up 205% over the last year because these financials just I mean they really are spectacular cash since the beginning of the year or really since the end of January has gone up as you'd expect company doesn't have a lot of long-term debt about $8.5 billion with these types of results you're not really concerned about that at all you get into a cash flow statement where you pull down this spectacular 4 point excuse me 14.9 billion worth of net income last year was just $2 billion look at your operating cash flow from three billion all the way up to $15 billion and folks this is a thre Monon number I know when we look at Google and apple and Microsoft they're kind of in that2 billion range but again if this company can continue its Revenue growth they they have nothing to really invest their money in their products sell themselves they don't have to build these day big data centers they don't have a bunch of employees they got to pour this money into so this company can get to like Google Apple Microsoft like operating cash flows and that's why this company can legitimately become the most valuable in the world believe it or not now unlike Intel they're not spending anything on these Fabs out there this is what's great about being a chip designer and not a chip manufacturer you don't got to spend anything you're not in Ohio you're not in Arizona building nothing you're spending a little little bit on Acquisitions and that's it so over the last year what did they spend this $15.4 billion just not over the last year over the last three months what they spend it on well they're buying back the stock so I mean they're just doing that Handover fist nearly $7.8 billion they paid a couple of dividends and that's it so if you can sustain this cash flows I mean forget the revenue growth the revenue growth if you can grow the revenues at this company over and above expectations particularly probably 20 or 30% over expectations what what you're looking at Microsoft and this company probably being the most valuable companies in the world this time next year but look even if you don't achieve that and we assume these expectations are in line well you're still going to have not 200% growth on Nvidia but you should have QQQ like results and outperformance from Nvidia certainly over and above the S&P 500 and other indexes out there but you're going to be generating massive operating cash flows that are going to be going back to buying back the stock and we've certainly seen how well that's worked for Apple over the last couple of years really the last decade and the stock really hasn't grown much from a revenue perspective certainly over the last year or two now from a technical perspective Jon Wong must be on that conference call Jensen Wong is one of the great Talkers in the world probably one of the best CEOs in terms of hyping his own product hyping his own company it's certainly worth at least listening or reading through the conference call we it looks like in the after hours we pushing up to all-time highs up here back up to we'll call it close to $1,000 fact we've clipped the ,000 mark on Nvidia in the after hours these are areas if you're overweight Nvidia certainly if it's balloon to a large portion of your portfolio these are areas where I would not blame any shareholder or even after the glowing review of these financials and even the outlook for NVIDIA this is where you take a couple of chips off the table folks you invest in the stock market for money for profit to make money and then go do something with that money Nvidia is not your firstborn son it is not your wife it is completely okay to peel off a couple of shares and get rid of them and then go buy yourself a Rolex go buy yourself a new car go buy yourself a vacation home or all those types of things I have done all of that in the stock market and I am telling you right now I've never ever regretted selling a stock like Nvidia which I've sold Apple Microsoft Google and then going and buying a watch going and buying a vacation home going and buying something nice for my family I've never ever regretted it could Nvidia shares continue to move higher we've discussed that they absolutely can and right now there's nothing in these financials and certainly the Outlook that makes me believe this thing is going to slow down any meaningful degree over the next year I think just the question for Invidia is how much will it outperform over the next year and how much higher can this valuation continue to move that was Nvidia q1 numbers will obviously be back on Friday for the than saag recap show I hope to see you then thanks for tuning in and good luck with your Investments
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