NVDA - Embedded Expectations Analysis - 2021 01 08
NVIDIA Corporation (NVDA:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 50.6x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about the data center business, supply chain constraints, and the Arm acquisitionSpecifically, management may lack confidence in their ability to sustain revenue growth, manage operating expenses, and grow in the enterprise market. Moreover, they may be exaggerating the benefits of the Arm acquisition and the potential of Omniverse and their pipeline. Furthermore, management may have concerns about their ability to capitalize on AI-related opportunities and supply chain constraints. Finally, management may be exaggerating the capabilities of the A100 GPUs and the data center business
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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