Watch BEFORE Nvidia Earnings [NVDA Stock]

let's get ready for NVIDIA earnings this

is a big deal and it could move the

entire stock market we could be at the

beginning of S&P 500

7,000 or 4500 in other words things

could be moving pretty quick after this

one but let's talk about what Market

expectations are and what could end up

happening with the stock given that

after AMD and arm both guided 80 and 60

basis point misses that's very small

less than 1% of a miss and their stocks

fell 8 to 10% Nvidia which almost seems

like it's the prop holding up the entire

stock market is a pretty big deal

especially since Nvidia makes up

6% of the entire US Stock Market think

about that for a moment one company

makes up

6% if you have had 16 nvidias it would

represent all of the stock market

capitalization of the entire United

States pretty crazy anyway what you want

to look for here is very different than

what you're going to see at something

like a Walmart or a Target right these

are companies that are trying to figure

out how do we get more consumers

spending on things that they have to

spend money on you're really appealing

to what is the lower to Middle land have

to spend their money on target this

morning is down 18% because they warned

a flat sales uh a flat sales quarters so

no growth uh inventory buildup and it's

buildup that they built because of the

port strikes that's actually something

that in my opinion made the economy seem

stronger than it really was in September

because companies were pre-ordering

expecting we could have a prolonged Port

strike going into one of the most

critical Hol shopping periods especially

now when the economy is slowing that's

what makes it so critical while as a

result of that targets down 18% because

they built up on inventory and they

couldn't really spend it and the Port

strike didn't really last that long so

oopsy dupsies Walmart did well that's

fine but we got to focus on Nvidia

because the Nvidia doesn't focus on that

lower income Nvidia focuses on the

highest of high they are basic basically

selling the white Club service to the

rich billionaires of the world the

Michael Sailors who when you go to their

house have a menu and then you look and

go hm what should I get and they look at

you and say son get everything one of

everything it's okay it's okay yes

that's what Nvidia is do they are

selling to the richest of the rich that

is what gives them large massive peee

pricing power they sell

to the metas the Amazon the Teslas the

xai the companies with massive cash flow

to blow on the best Edge they can get in

artificial intelligence and this is when

we look at what estimates are today

markets do think Nvidia is going to keep

growing so Nvidia guided that their

revenue would grow to about $28

billion this Q2 last ears were q1 it's a

little confusing given that we're in

November it's like oh we're about to get

Q2 earnings this is confusing yes here's

the easiest way to understand what

expectations are for NVIDIA Nvidia

guided for 24 billion of Revenue in the

first quarter they guided that when they

reported their fourth quarter earnings

right okay they ended up beating that

guidance by

8.3% and they were already expecting to

grow so they guide a number that already

shows good growth and then they beat it

this is the under promise over deliver

that Nvidia pulls off then right now

they're guiding us a

7.1% q to expectation but markets are

like nah nah nah n we know you're going

to under promise overd deliver again we

think you're going to beat with

15% quarter over quarter growth that's

pretty remarkable remble especially

consider this the next 4 years Nvidia is

expected to grow EPS this is per Wall

Street by only 25% per year on average

which just to make math simple if we do

25 divided 4 you know there's some

compounding in there but that's probably

about 6% quarter on quarter growth

sequential right quarter to the next

quarter to the next quarter well right

now markets are expecting Nvidia is

going to be at 15% which is 2 and half

times what people think their sort of

terminal growth rate is going to be

obviously if Nvidia misses here uh it'd

be pretty bad the implied volatility is

close to 8% so if you're at 147 and you

take off 8% you honestly you only go

down to like 135 this is unless

obviously there's a big Miss and you

have some kind of 20% decline you know

147 time8 you're still only at 117 right

they were at like $100 in August during

the Japanese

crisis you know and the recession could

still come it just seems like you know

thanks support strikes or otherwise it

keeps getting delayed who knows maybe

it'll get delayed

forever in recessionary environments

almost all stocks sell off so you know

everything we're talking about here is

absent

recession now what's fascinating is EPS

growth of 25% per year pretty good but

it actually makes their valuation pretty

reasonable consider this nvidia's

valuation sits at about a two Peg at

this level 2.01 Peg that's a 51.4 PE

ratio divided by 25.5 7% expected growth

of eps over the next four years gives

you a tweg if you think growth is going

to falter you probably don't want to

invest in this because of the

expectation that Nvidia is always going

to beat and raise

guidance if you think they can maintain

these expectations and just keep it

going then Nvidia could have a

reasonable valuation at a 2.67 Peg today

which would actually put the stock at

$196 up about 34 33% from where it is

now but it all comes down to growth on

this one and there are going to be a lot

of questions about Kevin what about

Blackwell we had a Blackwell delay that

got fixed but now we have concerns and

rumors over blackw chips overheating and

this is true there are overheating

issues but this is not so much an Nvidia

issue think of Nvidia as the developer

the designer of like a housing track the

neighborhood you know they got the

Monopoly mustache and they're like oh

yes design the house like this oh yes

build it like this uh and then Dell and

super micro come in all right we'll get

to swinging the hammer you know they're

like the contractors they're going to do

the work you know vertiv is going to put

in the plumbing for you the water

cooling Plumbing D and super micro they

put in the foundies and the framing and

they'll do the grunt work Nvidia is

collecting the big fat margin these

other guys are collecting very very

little margin but if there's an

overheating issue it's really the

problem of Dell super micro invertive

not so much Nvidia so I think Nvidia

will beat and raise and then what

they'll do is they'll shout out super

micro especially but probably also vert

and they say hey these guys already have

Solutions cooking for any kind of

heating issues and cooling issues this

is solvable in fact it just shows how

powerful and great Blackwell is this is

an AI Revolution a new Industrial

Revolution and we have the best machine

that exists and they are revising their

infrastructure and they're going to help

us crush it it's not us it's them but

don't worry they're going to fix it and

then you might actually see a big pump

on especially super micro because I I

kind of think it's pretty undervalued

right now and I think the accounting

issue is overblown I could be wrong

obviously so for me I look at Super

Micro as a potential huge beneficiary

here but I also look at uh my 2 by two

foundation for NVIDIA and I say

reasonable valuation as long as growth

doesn't disappoint you know frankly with

the tweg you know if even if I write

down their growth uh you know probably

let's see 2.67

uh 2 / 2.67 even if I write down their

growth by 25% so I assume that their

growth is only going to be about 19% in

EPS per year going forward it's still a

reasonable valuation where it is today

is it undervalued in that case no it's

fairly valued so I don't see nvidia's

valuation as excessive I didn't see I

actually saw it as a good deal uh when

it was in sort of the lower 100s and I

said they've got a good valuation right

now you know it's only like a 1.3 1.5

pay I didn't personally buy it because

I'm still nervous about a recession but

you know I can still provide you

information and have my own biases about

uh recession I'm very concerned about

recession I don't know if that's I've

made that clear but anyway their pricing

power is unquestionable so on the 2 by

two Foundation PP is

great uh sentiment probably somewhat

down because of the Blackwell

overheating concerns which are probably

overblown they're just going to brush

those off the balance sheet is extremely

robust at this company valuation is

quite frankly reasonable as long as the

AI spend and the revolution keeps going

and really I

think I mean I don't know one day

they're going to miss and people are

going to freak out but at least right

now I I don't know if that's this

quarter um so we'll see uh this is the

last um uh q1 earnings press release

that we have where they talk about AI

factories how they fix their Blackwell

delay uh how they've increased some of

their marketing for Q2 which I think is

interesting uh expectations I just gave

you sort of the revised numbers they're

really expecting a big beat here 30 uh

30 billion doll basically on top of the

28 that they're guiding uh and so uh you

know look this this is a company that

frankly it just it has a reasonable

valuation uh at some point GPT movements

you know like uh what should I say um oh

the historic VA by the way right now

it's pretty low it's like as low it was

before the GPT movement so you could see

a big move in volatility here even

though the implied volatility is a

little higher than average uh but um

what's remarkable really is that at some

point llms will become a commodity but

the question is will that be offset by

training artificial intelligence robots

or uh you know Drive platforms as more

companies try to get into creating their

own sort of wh

labeled uh full self-driving platforms

maybe even using the Nvidia Drive

platform I'm a big fan of or and Thor

you know the Nvidia Drive platform and I

think that does eat into the mode of

Tesla although that's not sort of a

ubiquitous and understood concept right

now most people say oh well Tesla has

all the data they can get the data as

well there's plenty of demand to compete

with

Tesla and willingness by companies to do

that so I'm very curious to see what

happens here I don't suspect that Jensen

is going to give us any bad news

uh if the growth misses they'll

tank but again I think they they will

continue to forecast strong growth

especially for this new Blackwell chip

uh and they'll prop up their their uh

friends so that's my expectation I think

you could get this stock to almost $200

with a you know before Christmas if they

miss though the entire pedestal of the

market could collapse and if you start a

market correction that lasts 6 to 12

weeks I think you guarantee a recession

so in other words uh no pressure but

Nvidia you're the only thing preventing

us from a recession right now so good

luck everybody make sure to get the meet

Kevin Alpha report by the way I'm about

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up thanks so much see you soon bye do

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congratulations man you have done so

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