Nvidia Beats Q2 Earnings by 62%: Using AI to Analyze the Stock

Nvidia reported Q2 earnings after the close today, beating earnings by a staggering 68 percent from last year. In this article, we look at several takeaways from the quarter and look at ML-based estimates.

a month ago   •   3 min read

By MLQ

Nvidia (NASDAQ:NVDA) reported Q2 earnings after the close today, Wednesday, August. 18th, beating earnings by a staggering 68 percent from last year. In this article, we look at several takeaways from the quarter and look at ML-based estimates from the MLQ app.

Key Takeaways

Below are several highlights from the quarter:

  • Revenue of $6.51 billion, increasing 68% year-over-year
  • Gaming revenue represented $3.06 billion, an increase of 85% YoY
  • Data center revenue also hit a record high of $2.37 billion, up 35% YoY
  • EPS came in at $1.04 per share, beating expectations by 3 cents

What Investors Were Looking For in Q2

As a Motley Fool author highlights, investors were looking at several key pieces of information about the quarter, including the Arm acquisition and the global chip supply shortage.

NVIDIA recently announced an acquisition of Arm for $40 billion, in their words to bring together a leading AI computing platform in order to accelerate their R&D and expand into high-growth markets.

Investors were looking to hear if the acquisition is still on schedule for the original proposed date. The U.K. government is considering blocking the acquisition of the chipmaker, citing risks related to national security. No final decision about this had been made prior to earnings, so this is a key consideration for the upcoming quarters.

Investors will also be looking for guidance on how Nvidia is dealing with the chip shortage and if that will negatively impact upcoming quarters. With new products on the horizon like the Grace CPU, investors want to know if there has been a change in the delivery timeline.

Finally, investors were looking to see if revenue has been impacted (positively or negatively) as economies around the world have started to reopen. The question on investors' minds is whether or not the easing of restrictions has reduced the time people spend in front of computer screens, particularly for the gaming division. Gaming is a significant part of Nvidia's overall revenue, so this could impact upcoming quarters.


NVIDIA's Bitcoin Revenue

Another key piece in Nvidia's Q2 earnings report that investors are looking at is their revenue from chips that facilitate Bitcoin and cryptocurrency mining. Nvidia has positioned itself as not only a game chip designer but also launched NVIDIA CMP HX, which is a GPU built specifically for professional crypto miners. As Barron's highlights, Β the companies CFO forecasted $400 million in revenue from crypto mining chips, which would represent over a 100% increase from Q1.


New Products

The company launched an AI workload product this quarter, Base Command and Fleet Command:

...to develop, deploy, scale and orchestrate the AI workloads that run on the NVIDIA AI Enterprise software suite

Nvidia also launched a virtual reality product, Omniverse, which is:

...a simulation platform nearly five years in the making that runs physically realistic virtual worlds and connects to other digital platforms.

NVIDIA: Machine Learning-Based Estimates

Below are several ML-based estimates for Nvidia from the MLQ app.

NVIDIA Social Sentiment

In terms of social sentiment, the company currently has a 78% positive and 22% negative sentiment based on data from StockTwits:

NVIDIA Ranking Scores

Below are several ML-based ranking scores of the stock at current levels:

  • K Score of 5: This is a ranking score between 0 and 9 with a high score indicating a higher probability of outperformance over the next month.
  • Quality Score of 9: This is is indicative of how well-managed a company is how strong the financial health of the company is.
  • Growth Score of 6: Indicative of a company's growth and related growth factors, including but not limited to ROA/ROE, year over year growth rate, etc.
  • Value Score of 2: Value score indicates whether a stock is overpriced or underpriced at current levels.
  • Momentum Score of 1: The momentum score measures the rate at which a company's price or volume is accelerating.

Overall, we can see these are quite neutral scores other than the high-quality score and low momentum score.

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