With NVIDIA Corporation (NASDAQ:NVDA) sitting at the heart of the ongoing AI buildout, the narrative also involves its AI GPUs and their demand. Cramer has remained an ardent supporter of the firm even as its share price performance has remained muted compared to historic gains. As NVIDIA Corporation (NASDAQ:NVDA) reported its fiscal second quarter earnings on August 26th, on the 24th, Cramer advised management to announce a buyback before the results were official to help the share price:
“What I have told and asked and pleaded with NVIDIA was, to look at what Apple did. During a period where people didn’t like Apple, they went and bought almost every share and they shrunk it by a third. And look at how Apple stock did. Even though everyone disliked Apple. . .we are in an irrational market. All people care about is the buyback. It’s not right. And that’s what they told me, you know Jim, we have a company to run.”
After the earnings, Cramer discussed the impact of guidance on NVIDIA Corporation (NASDAQ:NVDA)’s share price in a tweet:
“Nvidia’s quarter is a reminder that the guidance on the call is what triggers a big move. Hundreds of thousands of shares traded without that knowledge and the Journal had a quickly vanishing headline about how the quarter didn’t do much about quieting doubts…. hmmm”
NVIDIA Corporation (NASDAQ:NVDA)’s second quarter earnings saw the firm post $96 billion in revenue, $89 billion in data center revenue and $2.22 in non-GAAP earnings per share. The firm also guided $108 billion in revenue for the third quarter and a gross margin of 74%. Along with its revenue and earnings, the guidance also topped analyst estiamtes which had pegged it to sit at $104 billion. For its fiscal year 2028, NVIDIA Corporation (NASDAQ:NVDA) guided 70% annual revenue growth along with $279 billion in supply committments which indicated stable demand in the future for its products. Combined, all these factors indicate a business that is operating well and poised to continue to do so in the future.
On the flip side, during the same quarter, NVIDIA Corporation (NASDAQ:NVDA)’s third quarter gross margin guidance of 74% and a bottom ranging between 71% to 72% in the fourth quarter due to memory prices indicate that cost control is proving to be difficult. Additionally, the third quarter midpoint revenue guide marks an 89.5% annual growth for a sequential slowdown. Fiscal year 2028’s 70% growth points towards similar headwinds.
Looking at the hedge fund data, interest in NVIDIA Corporation (NASDAQ:NVDA) sharpened in the second quarter. Insider Monkey’s data shows that 285 funds had held a stake in the firm in Q2 while 275 had held a stake in Q1. On the valuation front, NVIDIA Corporation (NASDAQ:NVDA)’s forward P/E ratio of 24.27 is still quite reasonable compared to INTC’s 68.97 and AMD’s 64.94. Short interest as a percentage of float is negligible at 1.2%.
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Disclosure: None.
