And here we are ramping Blackwell, and it’s in full production,” said Nvidia CEO Jensen Huang, during the Goldman Sachs Communacopia + Technology Conference. “We’ll ship in Q4 and scale it — start scaling in Q4 and into next year. And the demand on it is so great … and so the intensity is really, really quite extraordinary.”
“Blackwell chips are expected to see 450,000 units produced in the fourth quarter of 2024, translating into a potential revenue opportunity exceeding $10B for Nvidia,” according to a post today on X.
The estimate during the August conference call was for $3Bn Blackwell revenue in Q4, so this is a big change. Fundamentally there wasn’t any real difference, just the quarterly cadence from Q4 to Q1, but this does help the stock in the short term and more importantly should put to rest any rumors or doubts about Blackwell design flaws.
I’m holding for now, let’s see progress on the new “Platformization” initiatives.
The stock was flat for the last 5 years, but did return about 7% per year for the last 10 – no surprise. The past year its down 9%.
As the older lumbering incumbent in networking, it was relegated to a commodity cyclical, more product sales instead of the bigger projects that Arista stole from under their nose with Microsoft and Meta, building out their platforms as a partner not as switch and routers or other networking gear seller.
It will continue to grow in the low to mid-single digits for revenues and sales and the valuation too reflects that, so it’s not that underpriced to buy, and the job cuts mean they do want to increase the bottom line – but that’s not a growth story, then.
This is a step in the right direction, basically getting to where Arista is now.
“Management was clearly trying to message that the demand environment is returning to normal; Cisco will continue to shift investments towards AI, Cloud and Security that is resulting in a re-allocation of resources; the company is collapsing its product structure under Jeetu Patel as ‘platformization’ across categories is happening; and AI and datacenter modernizations are occurring,” said Piper Sandler analysts James Fish and Quinton Gabrielli, in an investor note.
But, too little, too late?
It’s going to be a show me story – there is enough growth in AI and datacenter, but everyone has or had their sights on it for a while now.
Advanced Micro Devices press release (NASDAQ:AMD): Q2 Non-GAAP EPS of $0.69 beats by $0.01.
Revenue of $5.84B (+9.0% Y/Y) beats by $120M.
Record Data Center segment revenue of $2.8 billion was up 115% year-over-year primarily driven by the steep ramp of AMD Instinct™ GPU shipments, and strong growth in 4th Gen AMD EPYC™ CPU sales. Revenue increased 21% sequentially primarily driven by the strong ramp of AMD Instinct GPU shipments.
Client segment revenue was $1.5 billion, up 49% year-over-year and 9% sequentially primarily driven by sales of AMD Ryzen™ processors.
Gaming segment revenue was $648 million, down 59% year-over-year and 30% sequentially primarily due to a decrease in semi-custom revenue.
For the third quarter of 2024, AMD expects revenue to be approximately $6.7 billion vs. $6.61B consensus, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 16% and sequential growth of approximately 15%. Non-GAAP gross margin is expected to be approximately 53.5%.
TSM hit it out of the park last week, confirming that the high-performance semiconductor sales are doing extremely well.
Q2 revenue growth of 32.8% y/y and net income growth of 29% y/y.
Q3 expected to set another revenue record on strong AI and smartphone demand, full year guidance raised. Full Year expectations are for 28% and 24% earnings growth to $6.4 per share.
3Nm (the most advanced node powering Nvidia, Apple, etc.) revenue was 15% of sales. Nvidia’s not the only company with higher prices, they in turn pay TSM quite well for 3Nm processing! 5Nm also went to 35% of sales – the two now dominate TSM sales with 50%.
If TSM didn’t have geopolitical risks from China, and Trump demanding payments for protection didn’t help either, this would have been easily 40x earnings, over $250 per share. given the technological and market share lead. Overall, TSMC should continue to dominate in advanced process nodes and high-volume manufacturing for many years.
I had sold 20% around $183 last June, but am going to hold on to the rest, there’s really nothing much we can do with Chinese tensions – if there are nasty developments from that front, we’ll have much bigger problems than the price of TSM!
Micron (MU) Rating Upgrade to Buy from Hold, $100.
Results expected this afternoon were very good, and I am more optimistic about the guidance. I was hesitant to add or recommend buying because it looked overpriced compared to its historical average and it had doubled in the past year.
Nvidia’s comments on needing more high bandwidth memory (HBM) vendors like Samsung, suggest the Micron is more likely to have challenges meeting demand. Unlike the past year when they had to discount inventory.
With this beat and these upgrades from Wall Street analysts in Barron, I would start buying.
“Micron is likely to report continued soaring demand for “high bandwidth memory,” or HBM—parts that combine multiple DRAM chips to improve data-processing speeds.
TD Cowen analyst Krish Sankar wrote in a recent research note previewing the quarter that when it comes to Micron, “HBM remains the centerpiece of attention.” Last week, he lifted his target for the stock price to $120, from $100. He said there is a “potential scenario” where the stock can reach $150, for a gain of more than 50% from current levels.”
For the May quarter, the Street is projecting revenue of $5.98 billion, with an adjusted profit of 8 cents a share. Analysts expect the rebound to continue from there. Estimates for the August quarter now point to $6.86 billion in revenue and an adjusted profit of 81 cents a share.
FQ3-24
Revenue 6.6Bn Expected 5.8Bn
EPS $0.17 Expected $0.08
FQ3-24
GAAP(1) Outlook
Non-GAAP(2) Outlook
Revenue
$6.60 billion ± $200 million
$6.60 billion ± $200 million
Gross margin
25.5% ± 1.5%
26.5% ± 1.5%
Operating expenses
$1.11 billion ± $15 million
$990 million ± $15 million
Diluted earnings per share
$0.17 ± $0.07
$0.45 ± $0.07
Wedbush analyst Matt Bryson wrote in a recent research note that recent trends in prices for both DRAM and NAND memory chips suggest Micron will beat its guidance for the quarter. Bryson, who has an Outperform rating on Micron shares, said he expects positive commentary from the company on the outlook for HBM demand.
“Since last summer, management has provided consistently optimistic commentary around anticipated progress with HBM in light of the technology being a derivative of their highly successful standard DRAM nodes,” Bryson writes.
Meanwhile, analysts say the balance between supply and demand has stabilized following a supply glut that spanned multiple quarters.
“Customer inventories have largely normalized, demand conditions across markets appear stable, and supply growth remains muted,” Raymond James analyst Srini Pajjuri wrote in a research note previewing the quarter. “In addition, HBM is a significant secular driver that could add $1.5-$2 in incremental EPS at the next peak.”
Pajjuri maintains an Outperform rating on the stock.
Qualcomm (NASDAQ:QCOM) shares rose 2.7% in extended trading on Wednesday after the semiconductor company reported fiscal first-quarter results and guidance that topped expectations.
For the period ending Dec. 24, Qualcomm earned $2.75 per share on $9.92B V consensus estimates of $2.37 per share on $9.52B in revenue.
QCT revenue rose 7% year-over-year to $8.4B.
Revenue from handsets rose 16% year-over-year to $6.69B
Automotive sales jumped 31% to $598M. – this will be Qualcomm’s biggest growth catalyst.
Sales from IoT plunged 32% to $1.13B.
Licensing revenue fell 4% year-over-year to $1.46B.
Revenue and Earnings Midpoint Guidance is higher at$9.3Bn and $2.3 for the next quarter.
Qualcomm said it expects to earn between $2.20 and $2.40 per share, with revenue forecast between $8.9B and $9.7B. Analysts were expecting $2.25 per share in earnings and $9.28B in revenue.
