NVDA - Embedded Expectations Analysis - 2020 03 23
ï€ NVIDIA Corporation (NVDA:USA) currently trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 29.5x Uniform P/E. At these levels, the market is pricing in expectations for Uniform ROA to remain near all-time highs, but management may have concerns about their inference business, growth, and upcoming projectsï€ Specifically, management may be exaggerating the launch success of GeForce NOW, and they may lack confidence in the potential of upcoming games with ray tracing (RTX). Additionally, they may lack confidence in the inference platform, in terms of demand for this model, and the potential growth associated with it. Furthermore, they may have concerns about the potential of DRIVE AGX Orin and more pronounced seasonal headwinds on the different components of the gaming business. Also, they may be exaggerating demand growth for AI, and they may lack confidence in their ability to meet CapEx estimates. Finally, they may be exaggerating the demand from car companies for tech, and they may lack confidence in their ability to bring cloud gaming to China with their Tencent collaboration
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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