Fasten your seatbelts because NVIDIA’s journey post its August 23 quarterly report is nothing short of a rocket launch. Analysts initially rode the wave of optimism following strong guidance from Jensen Huang & Co. Yet, what Wall Street may not have fully grasped is the sheer force of the AI tsunami set in motion by NVIDIA.
Picture this: two weeks post the report, and the sales and profit estimates for NVDA just keep soaring higher, defying expectations. It’s like the tech world’s version of a thriller plot, where every twist and turn adds another layer of excitement.
Back on September 6, I laid out the scenario after the Starship Jensen’s results and guidance. Brace yourself for the impact: a jaw-dropping $2 billion beat on the Q2 top line and a forecast that boldly predicts nearly a $4 billion beat for the current Q3. Wall Street’s spreadsheet wizards, who may have initially underestimated NVIDIA’s hyper-scale accelerated computing growth, have been busy revising their models with a newfound bullishness, propelling NVDA to a Zacks #1 Rank.
Let’s dive into the numbers for a reality check. The consensus revenue projections as of September 6 stand as follows:
- FY’24 (ends January): $53 billion, marking a staggering 97% growth.
- FY’25 (kicks off in Feb): $76 billion, showcasing a robust 43% growth.
And it’s not just about revenue; profit optimism is riding high too. FY’24 EPS consensus just did a sprint from $7.79 to $10.46, while FY’25 EPS consensus experienced a leap from $10.77 to $15.48. That’s a whopping 48% annual growth after the current year’s mind-blowing 210%+ advance.
Now, for the valuation aficionados, NVDA is trading at 30X EPS and a modest 16X sales based on these stellar estimates for the coming year. As far back as June, I hinted that as NVIDIA inches toward a cool $100 billion in annual revenue, it should continue to command a premium, hovering around 20X sales.
Cue the drumroll, because in my June prophecy, I suggested a moonshot for NVIDIA’s sales, envisioning a climb to a mind-boggling $100 billion annually by 2026. Keep in mind; this was when sales estimates for next year were just starting to stretch their wings beyond $50 billion post their May earnings and product announcements.
NVIDIA, you’ve got our attention, and we’re all strapped in for this moonshot journey to tech greatness.
