저자: Kevin · 외국인
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엔비디아는 실적 침체 속에서도 AI 가속기 시장 80~88% 점유와 CUDA 해자로 장기 성장성이 있으나, 현재 주가(306달러, PEG 약 2.66)에 이미 약 25% 성장이 반영돼 고평가. 단기(실적 발표 전후)는 재고 과잉과 중국 규제 리스크로 약세 전망이며, 장기 투자 매력은 인정. 개인적으로 비중 확대보다는 조정 후 200~250달러대 매수를 선호.
다듬은 글
well let's talk about Nvidia reports earnings today but we've got to go through some of the big competitive advantages for NVIDIA even Beyond earnings we'll talk a little bit about earnings expectations and some of the things to look for in the finances but most importantly we want to talk about what makes Nvidia an interesting potentially unique investment opportunity in the long term what are some of its advantages so outside of the short-term news what's the long-term thesis for investing in video and what do those finances look like well let's start just there so when we actually look at the finances we can see that Nvidia and much like most of the chip companies are quite frankly in a bit of an earnings well recession this is the latest uh Nvidia report for the Year this is their latest annual report for the year ended January 2023 so in other words uh the full year of basically 2022 Jan de Jane you can see that Revenue was flat while Revenue was flat their cost of sales so their costs of goods sold their products cost them 23 percent more so their income was flat but 23 more cost for the actual products their research and development up 39 sales and general and administrative SG a of 12.6 leading to a net income decline of 44.7 that is a negative a negative 44.7 decline in uh net income this is an example of your earnings recession now it could be argued that hey look the company exploded and the fact that you have flat revenue is actually fantastic because think about it you went from 16 uh 0.6 billies in January of 2020 uh uh one to 26.9 billies of revies right after that uh which is freaking awesome because if you look at that it's like hey wait a minute Kevin that is a 62 increase and the fact that we're flat off of that not bad it's literally like growing like this then having this exponential explosion uh and then being flat yeah I wish it didn't correct because I liked my drawing better it's kind of like growing like that and then having this explosion of exponential and then flattening at least it didn't plummet back down to where it was just sort of a little triangle there right so this is actually pretty powerful even though costs are going up the revenues are flat and then that income is like down 44 you've left the stimulus era right so of course you've got these really negative calms and these negative comps have led a lot of these manufacturing company or a certain manufacturing companies these chip designing companies like Nvidia AMD right they all pretty much use tsmc to manufacture maybe Intel will come in the race in the future though they've got some work to do they actually think that Intel could be a big player in the one and a half to two nanometer chip space we're not quite there yet right now we're working in the three to five nanometer uh chipset space that's the spacing of uh transistors and chips the the smaller in theory the more efficient and the better these chips could be the stronger and more powerful that's all down the road well Intel could be a game changer in manufacturing probably in 2024 25 26.
uh although they could also be a value trap and end up going bankrupt but that's really a topic for a different video we talk about Intel a lot in the course member streams uh mostly because that thing's trading for a PEG ratio of like 0.5 now before I lose you on PEG ratio remember what a PEG ratio is it's how much you're paying for growth at a company and one of the things that I like is I like looking at companies uh usually around a one and a half to 1.69 1.7 PEG ratio that's about where Tesla is trading now it's about where end phase is trading now Etsy is trading below that right now a problem with something like Nvidia is it's trading for a little bit above that range right now at 306 dollars per share 306 dollars this is your share price and you'll see how to calculate Peg as well uh right now we're looking at an a full year of 2023 so first quarter earnings aside full year of 2023 which is their fiscal 24.
we are looking at earnings of about four dollars and 60 cents projected we'll get some guidance on that but it'll probably be somewhere close to that 306 divided by 4.60 puts you at a p e ratio a forward p ratio so we say FPE a forward p e ratio of 66.5 that's a little bit rich now the company in terms of growth is expected for 25 6 7 and 28 all together to average about 25 growth well if we divide by uh 25 growth so in other words that p e by 25 uh removing the percent is what you do for this math divide 66.5 by 25 you get a PEG ratio of about 2.66 unfortunately just on a simplified valuation measure that's quite a bit above where we probably ought to be of closer to 1.6 1.7 it's about 66 above that that's quite a bit stretched right now now maybe nvidia's earnings will explode more and that's possible that's the hope is that nvidia's earnings will explode more because of well the whole reason people are investing in video right now and it's obviously artificial intelligence everyone's investing in Nvidia right now because it's seen as the best play for artificial intelligence going forward and that might be the case because quite frankly when it comes to Dedicated gpus graphic processing units uh which are going to be the strongest and most powerful for providing data and services for well artificial intelligence Nvidia takes about 80 to 88 of the market share that's really really powerful so when you have Nvidia taking 80 to 80 percent of that market share you kind of look and go well if you're going to want to invest in AI maybe just maybe investing in Nvidia is the place to do it the problem is AI has really been hype trained up before we've actually started to confirm where AI revenues are going to come from this is something that I always caution and it is this idea of okay well look AI we know is going to be great I think all of us agree that it's going to add productivity to us as individuals if you're not becoming more productive because of u end up getting left behind you don't want to get left behind because if you get left behind you're more likely to lose your job you're less likely to get a promotion you're less likely to as actually get ahead in life so you want to incorporate AI in your life and we want to invest in AI related plays this is why I have a program on building your wealth so we've got programs on investing stocks and real estate we do fundamental analysis on stocks you know we'll do some fundamental analysis on Nvidia here as well and we'll do some earnings expectations but also well we have a course on building your incom the AI segment and how to actually incorporate AI in your life comes out June 1st so check that out before the pricing goes up after that content drops but what do we know about Nvidia well we know a lot we know that Nvidia is uh using tsmc to manufacture a lot of their chips and they sell their gpus to the software companies and server companies that use them for artificial intelligence think Microsoft AWS Google Cloud all of them when they use AI most of the AI technology and processing in the compute power hours being put through Nvidia gpus now Google does have these tpus which we don't want to go into this super detail of what all these different processing units are in that case that's a tensor processing unit and Amazon's also making its own server-based uh chipsets but when it comes to actually processing artificial intelligence Nvidia has like I said 80 80 of the lead now there are two different types of Graphics units they're sort of your integrated Graphics chips in which case Nvidia actually has a very small market share of them this is sort of for your regular consumer products whether it's a laptop or whatever but when it comes to Dedicated graphic processing which used to be uh ethereum mining for example with gpus which no longer is that's LED their Gaming revenue to absolutely tank that's contributed to their earnings recession uh that's gone now right but when we have dedicated uses for artificial intelligence what are we looking for with looking for dedicated use chips in Nvidia is the 80 to 88 market share of this and again they're using tsmc to manufacture but tsmc has also got a little bit of an up their evaluation probably also trading for somewhere right around a three peg but people see Nvidia as the really shovels of the gold mining race in artificial intelligence and the reason people call it sort of a picks and shovels play is again we don't know which software companies are going to win when it comes to Aeon we think that oh Google's going to win or open AI is going to win or all of these you know maybe Microsoft will win because of their investments into uh uh you know open AI or you know Google's Bard will win but the problem with this is we don't know yet which software is going to win in my opinion the best software is where people are going to flock to as soon as there's a better chat bot everybody goes over to that chat bot and dumps The Bard and open AI behind that's a big problem especially since when you look at a company like Google in terms of an investment you're looking at advertising revenue and network placing placements on websites representing 69 of the company's income well if that income starts bleeding down because you need to search less sure AI will contribute to some sort of income uh at Google how do we know how much income that's going to contribute what I worry about is that AI will contribute Revenue like this for Google well their ad Revenue goes down so you'll see an increase of AI Revenue here for Google but you'll see search and advertising Revenue Decline and you potentially have this massive loss as potentially some of these ads go to other AI platforms we just don't have that certainty yet but we do know that Nvidia is probably your AI processing play and that's exciting this is one of the reasons nvidia's blown up so much recently one of the things to know as well is that a lot of people use the Nvidia architecture for actually building applications or programming on and I'm not a programmer but a lot of people use the software stack that Nvidia uses to extract the power out of gpus the coda system is amazing for doing exactly this and a lot of people prefer it and when they prefer this for their server infrastructure they have to use Nvidia chips AMD is not even close yet in in terms of these these AI processing chips that Nvidia has and they're just now I mean way after Nvidia have they gotten into creating their own software Stacks to try to compete with it what Nvidia has so Nvidia has some massive advantages now what's also exciting a lot of the Cuda by the way creates a massive mode for NVIDIA so when you're investing in video you're not just creating it or not just investing in this chip designer you're also investing in their software and the moat that they have because of their software whether it's the Omniverse or Cuda or otherwise now it's worth noting that if you look at the top about 111 actual Graphics units listed on Benchmark UL what's remarkable is the first 111 chips basically show you a dual opoly you have AMD and Nvidia that's it when it comes to graphic units but when it comes to AI once for those servers Nvidia is the winner it's not until the 112th chip that you actually get to an Intel graphic Processing Unit which is pretty remarkable now one of the downsides that you're seeing right now is unfortunately Nvidia has this huge backlog of inventory of gpus because of the lack of use from ethereum Mining and also everybody's already bought their new gaming PC during covid so you have this massive PC Crush you've got a massive inventory glut so you actually have some risk factors for NVIDIA in the short term that potentially inventory gluts are going to reduce pricing power at companies like Nvidia you're going to see reduced margins and you're going to see reduced revenues before you actually see the AI revenues come through just because AI started becoming really exciting in the last two months doesn't mean all of a sudden every company Under the Sun is buying more Nvidia chips it could take years to really see AI play out at Nvidia so I think Nvidia is really this play that you have to look at from a long-term point of view rather than something that you want to play short term I actually actually would be short-term bearish on Nvidia trying to play earnings mostly because we don't know I mean maybe that's already built into the expectations that's always the funny thing with earnings uh you know when you look at earnings you're looking at an implied one-day volatility movement of 4.7 percent so 4.7 stock movement after this earnings doesn't seem that big uh nvidia's EPS has beat four out of eight times so it's a total coin toss although their revenue has beat seven out of eight of the last times so there's a good chance they'll beat on the top line again but potentially again miss on the bottom line so we'll see but we know nvidia's had one heck of a run-up recently because of AI and I don't think AI is going to be contributing to a big portion of their revenue anytime soon even though we do know and maybe they're forecasting their guide will help because if they give a really Rosy full year guide maybe that'll help boost the stock but I really think it's going to be a minute before we see some of this this Revenue actually pushed through Nvidia doesn't really do a 5G we know this is more of a Qualcomm play but some people have been asking about that you've got competition coming for a manufacturing but that could actually contribute uh to uh to Nvidia the more companies like Intel or Applied Materials or whatever uh Micron uh in America that might end up manufacturing under the chips act those companies uh will benefit from from the stimulus checks the governments are handing out for manufacturing chips in the United States this is good and that could be good for potentially reducing some of the costs of Nvidia actually having to manufacture chips because remember Nvidia doesn't manufacture they design and create software and then they Outsource the manufacturing this is very typical only Intel really does both they both design and manufacture but even like a Tesla they might design their own chips but have somebody else manufacture them so uh there is some excitement about this manufacturing Coming to America this sort of reassuring some worry that this is going to be inflationary and actually increase the cost of of chips and even the CEO of Nvidia just today on the financial times argued that we have to be careful about more of these restrictions against China and sort of limiting China's exports uh mostly because they could end up hurting nvidia's ability to actually sell this massive backlog of chips that they have so there are some short-term concerns as well with the United States potentially being too aggressive against uh China and how more of these chip bans could potentially actually encourage China to uh to manufacture their own proprietary chips at the downside or to the downside of Nvidia but just today in the financial times you have the CEO of Nvidia warning about enormous damage from the escalating battle over chips between Washington and Beijing suggesting that your tying silicon Valley's hands behind their back if China can't buy from the United States and they just end up building their own chips so a big warning there from Jensen your CEO of course China's uh China before all of these uh sanctions or as many of these sanctions China represented somewhere around 24 of nvidia's order book so big chunk of it I actually like investing in companies that have exposure to China generally because I don't have to invest in Chinese companies to get Chinese growth I can invest in American companies to get that growth I like that uh you did just also have an announcement between Apple and broadcom but that's more of a middle finger to Qualcomm than it is to Nvidia Intel dominates the CPU market and maybe the integrated GPU Market contributes to this but really Nvidia when it comes to Dedicated trips and AI chips they're the almost the only game in town on top of that they're paying somewhere around 1.9 percent in taxes because they run a lot of their revenue through subsidiaries whether it's in the Cayman Islands the Netherlands or other countries in Europe this has led a lot of people to be very frustrated over some of the tax credits and and opportunities that they're able to do to avoid or take advantage of to avoid taxes and a lot of people Slam in a video for this Nvidia sees this as just smart taxation running some of their revenue even through Israel or Hong Kong and they suggest this allows them to spend more money on R D which Nvidia will also benefit from chips uh the chips act and r d spending which is great remember this is this is stimulus money it's basically free stimulus money uh which is very exciting these these companies will benefit tremendously from Investments directly from the government and money printing so if you like investing where stimulus money is going chips manufacturing and chips you have to be careful though because if you search like top chip companies in America you might get search results like Frito-Lay or lays or whatever it's a problem so you have to be careful but uh anyway I I do I I just want to make sure we're doubling down on how important Cuda is because a lot of current AI systems are actually trained on this coding infrastructure of Cuda it is a massive mode for NVIDIA it has been in development for 16 years it's their proprietary uh software stack and it lets you extract That Power from the Nvidia GPU so if you just if you want to run processing through the gpus rather than just the CPUs you have to use Cuda uh and and Cuda is just it's robust it's great it's a fantastic software so the competition just doesn't hold a candle to this and so people like manufacturer or basically coding with this compared to uh amd's uh Rock M which is you know sort of your closest second but it's still a big second uh it's probably some people say it's nine years behind Cuda it probably isn't nine full years behind it's probably more like two or three years behind but uh it came nine years later so uh it's also worth noting that Nvidia has transitioned from gaming to Data Centers and this has been critically important because gaming has just absolutely gotten destroyed uh or post covet because again everybody's already got their uh uh they've already got their new gaming PC uh and gaming has been substantially less of of a level of importance for nvidia's Revenue uh amd's catching up on gaming as well so maybe less of an area to to really grow but really what's what's important to know is that right now the market is already pricing in about 25 percent growth for NVIDIA uh and that's at a PEG ratio of 2.6 I think we said uh yeah 2.66 you're already paying a premium for that 25 growth I think 306 is a high level I'm not saying that Nvidia deserves to go down I wouldn't short this stock just because it's such a blindly easy pick for institutions to go oh we need AI exposure just buy Nvidia like a drunken sailor because yeah artificial intelligence that doesn't mean it's going to outperform other stocks though in the near terms so while I have exposure to Nvidia I'm not I'm not very excited about having a super high allocation to Nvidia uh right now would I consider trimming before earnings potentially am I going to I I have no idea uh I I don't generally like playing or earnings I think it's very risky to do that but I do think there's a lot of enthusiasm that's coming before the the actual stake right like the analogy of selling the sizzle before the steak yay AI boom okay where are the AI revenues uh they'll be here in a few years like they will come but it's going to take a little minute and and at this PEG ratio I think there are better deals to buy uh I mean you know we just had a report uh from Goldman Sachs that online retail is starting to explode again in April based on retail sales reports from April and you're looking at uh Etsy trading at about a 1.3 times Peg so it makes you wonder okay do you want to get into that kind of consumer discretionary do you if you want AI Tesla's much cheaper than in video right now at you know somewhere around a 1.6 to 1.8 Peg you have to be careful when you do these these uh calculations as well not to use 2022 numbers you have to go current current year out so 9 to 16 18 months out is generally what I do with evaluations because you're getting away from some of the whole of the earnings recession that you saw in 2022.
so uh do keep in mind for expectations we're looking at 92 cents of adjusted EPS Gap EPS we're looking at 61 cents Revenue expectation we're looking at 6.52 billion dollars net income 2.27 Bill expected uh data center revenue is expected to jump nicely so hopefully that uh that stays that way uh again if if you run some DCFS on these you're you're really looking at growth already priced in at least 25 already priced in some are arguing depending on how you run your DCF that you could be sitting around 30 already priced in 35 price damn uh so a lot of uh a lot of uh richness already priced there we'll leave it at that but again you know they're going to have a great growth story over the next decade and it's possible that the growth that's been forecast before this AI boom hasn't yet really been updated to reflect how much growth is truly going to come from AI though I will say I think AI is going to be a big part of what we hear about in the earnings call today so that'll be fascinating and so I'm super excited to see what happens here at the same time again AMD is is really focused on gaming and yes they're going to focus on to some extent uh servers and and AI for Enterprise the the right focus in my opinion is on Ai and and these server chips and I think Nvidia is just playing the game correctly here they've got the edge with good they've got the moat with Cuda uh and uh and they just they're dominant in the market so there's little you could say about how Nvidia is not going to be a massive beneficiary of AI they almost certainly will be a massive beneficiary of AI but uh the valuation today hey let's just say you know I I hope uh I hope they crash uh over the next few earning Cycles so you could pick up Nvidia cheaper maybe when the AI hype cycle dies down a little bit uh am I jumping up and down about buying in a 306 hey who knows you know maybe they give Rosie guidance and they're up 10 and you're like ah should have bought you know but the valuation is Rich and usually the market does a good job of eventually leveling out those Rich valuations so uh if I had to say what would be a little bit more of a fair price right now uh for NVIDIA I'd probably say you'd want to be closer to and people are gonna get mad at me saying it but probably 200 to 250 would be more reasonable if you were under 200 like we were for a while when I initiated my position in it around 150.
well then it was just juicy but duh I mean it's doubled since then so uh anyway uh remember if you want all of my buy and sell alerts join the stocks and psychology of money group link down below if you want to join me on the AI drop make sure you join before June 1st for members who are already part of uh the income course or getting that sector for free and you can lock in your price as well before we increase the price again when the content actually comes out on June 1st the other content's already in there but the AI content is coming out on June 1st uh so with that said very excited about Nvidia long term short-term bearish uh it doesn't mean I'm gonna dump all of my uh Nvidia exposure beforehand though but uh who knows maybe a little trim is in store but yeah anyway that gives you some insight on a video hopefully it's useful for you even Beyond this next uh earnings uh set that comes out and uh yeah I wouldn't bet against them long term for sure just like you should bet against those courses on building your wealth thing down below see you later a quick follow-up on Nvidia some people want me to look at the balance sheet and the cash flow statement fine fine I'll do that okay here's the quick skinny on it they've got about 13.2 billion dollars of cash and marketable securities they've got a short-term liabilities in in the Kevin math I do Kevin math a certain way of about five billies and maybe about 11.6 in long-term debt free cash flow you're sitting at about 3.8 billion so you've got free cash flow so the the debts don't terribly much matter here they've got plenty of operating room uh actually pretty pretty good financials
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