NVDA - Embedded Expectations Analysis - 2018 12 14
NVIDIA Corporation (NVDA:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.1x Uniform P/E. However, even at these levels, the market is pricing in bearish expectations for the firm, and management has concerns about their data center segment, crypto market headwinds, and their investments in their key platformsSpecifically, management may lack confidence in the sustainability of strong computing demand growth, and may be understating how long they expect the crypto market to recover. Moreover, they may be exaggerating the historical demand for real-time ray-tracing technology, and may lack confidence in their ability to quickly adjust inventory channel levels. Additionally, they may have concerns about their ramp-up of Turing, and may lack confidence in their ability to maintain strength of their data center business. They may also have concerns about their ability to expand their AI offerings to do rendering for film, and about the fundamental dynamics of the data center segment. Furthermore, they may lack confidence in their ability to partner with more Level 2 mass-market car companies for their DRIVE platform, and to convert that platform to support manufacturing robots. Additionally, they may lack confidence in their assertion that the headwinds in the crypto market do not change their fundamental dynamics, and in their ability to drive growth through their investments in key platforms
NVIDIA engages in graphics processing unit (GPU)-based visual computing and accelerated computing platforms. The company has two segments, GPU and Tegra Processor, which are based on a single underlying architecture. The company's GPU product brands are aimed at markets including GeForce for gamers; Quadro for designers; Tesla and DGX for artificial intelligence data scientists and big data researchers; and GRID for cloud-based visual computing users. The company's Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for autonomous robots, drones, and cars, as well as for game consoles and mobile gaming and entertainment devices.
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