There was another big problem with NVDA's financial results.

- Margins revised downward


The guidance announced in the previous financial results predicted a decline in gross margins for this quarter.


The guidance for this quarter (July) was 74.8%. And the result was 75.1%. A beat of just 0.3%.


Gross margins for the April quarter were 78.4% and the guidance was 76.3%, so there was a beat of about 2%. In other words, the beat for this quarter's guidance was very weak.


My model was expecting 76%. And probably the analyst's model was too.


And the guidance for October was even lower, at 74.4%.


NVDA's demand was far outstripping supply, customers were lining up to fight over products, and shouldn't NVDA be able to sell chips at whatever price they wanted?


Why would the gross margin fall in that situation? Something's wrong.


Furthermore, I am not entirely convinced by the reason for the decline in margins mentioned in the conference call.


It seems that the more Blackwell's sales grow, the lower the margins become, but why are the latest and most expensive chips lower in margin than the previous model?


Are the chips too expensive and cannot be sold unless the price is lowered? That is also strange.


Many institutional investors sell the stock if something does not add up, and then investigate. If the results of their research are satisfactory, they will buy it back even if the price is higher than the price they sold it for.


This is because institutional investors fear a big fall rather than a big rise. The "unknown" is the most frightening thing. Institutional investors aim for "investments that will not lose".


Risk management is the most important element for institutional investors. That is why I think some investors sold after the financial statements because they had doubts about the trend of gross margins.


・Blackwell's delay is no problem


I think that the delivery delays of Blackwell, which have been rumored many times, have almost no effect on the stock price. A delay in sales of 2-3 months will not affect the fundamentals.


・What will happen to the stock tomorrow?


NVDA's stock price movements after the financial results are dominated by speculative investors rather than fundamental investors. They aim to get rich quick by using ultra-short-term options.


Speculators who went long (buying) on ​​the financial results in the hope of a short-term rise have probably already sold or will sell tomorrow.


If a downward trend is confirmed after the market opens, trend-following algorithmic trades will pile up, so in that case, I think it would not be strange to see a double-digit drop tomorrow. This is the scenario I predicted the day before yesterday.


The financial results themselves were good, so there is a possibility that the stock will turn upward tomorrow. But for that to happen, fundamental investors must come and buy.


For fundamental investors, I think the downward revision of gross margin, which does not match the slightly pessimistic guidance of $0.5 for next fiscal year mentioned above, will be a bottleneck.

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