Flashy Bananas, NVIDIA earnings, & Way More

In partnership with

THEWHITEBOX

TLDR;

Welcome back! This week, we take a look at stellar releases, including OpenAI’s Codex Max and Google’s Nano Banana Pro. Trust me, their capabilities are going to impress you, particularly the latter.

We also cover NVIDIA’s earnings, going way further than most analysts and headlines to show that NVIDIA continues to rock, but its foundation and competitive advantage may be eroding.

Additionally, we’ll take a look at other news, including regulation, new ways to measure progress, and more.

This week comes packed with insights. Enjoy!

PUBLIC MARKETS

NVIDIA Presents Quarterly Earnings. Bombs Them.

Two days ago, we had NVIDIA’s quarterly earnings, the seminal event in public markets these days because it’s what most investors use as the “market’s compass” to see whether to run for the hills or continue believing in the AI buildout (recall that the AI buildout happening in the US does not only affect US companies, but has profound impact on Asian markets).

Luckily, the results were record-setting again. NVIDIA reported record revenue of $57.0 billion for the quarter, up 22% from the previous quarter and 62% from the same period a year ago.

Gross margin (top-line revenues minus direct costs of building their products) on a GAAP basis was 73.4%, up about one percentage point from the previous quarter but modestly down year-over-year.

GAAP stands for Generally Accepted Accounting Principles, a set of accounting rules public companies must follow when presenting results. Companies also share non-GAAP results they believe better reflect their business's real revenue/cost structure.

Net income reached approximately $31.91 billion, and diluted earnings per share were $1.30, both significantly improved from the prior year (i.e., the company is more profitable)

They also generated strong cash flows, with operating activities bringing in $23.8 billion in the quarter.

Unsurprisingly, the data center segment once again drove the majority of growth. Revenue in that segment reached $51.2 billion, up 25% from the previous quarter and up 66% year-over-year.

Within that, compute revenue was $43.0 billion (up 27% sequentially and 56% year-over-year), and networking revenue was $8.2 billion (up 13% from the prior quarter and 162% year-over-year).

The gaming segment, NVIDIA’s traditional main business, grew 30% year-over-year to $4.265 billion, though it slipped slightly (-1%) versus the prior quarter.

Professional visualization revenue (GPUs for design and other rendering stuff) was $760 million, up 56% year-over-year and 26% sequentially, and automotive revenue hit $592 million, up 32 % year-over-year and 1 % from the prior quarter.

Recall that NVIDIA has partnered with Uber to create a fleet of autonomous driving cars, so this is a critical segment to follow over the next several quarters.

On the cost side, operating expenses rose:

GAAP operating expenses (e.g., wages, R&D, etc.) increased 36% year-over-year and 8% sequentially; non-GAAP operating expenses were up 38 % year-over-year and 11% sequentially.

Inventory holdings rose to $19.8 billion as of quarter end, up from prior periods, reflecting extended commitments for supply and lead-time parts.

The company also noted that multi-year cloud…

Enjoyed the introduction? Subscribe or sign in to continue with this edition.