Weekly Earnings Review: August 21, 2023- August 25, 2023

     Earnings season is officially winding down. This week will be an easy week, as I only have 2 holdings reporting earnings. The 2 companies reside in the technology sector and one of them has been the talk of 2023. It will be interesting to see how these companies do. I will assess the quarters and dive briefly into hot topics printed on the earnings release.

Wednesday, August 23, 2023

NVIDIA Corporation (NVDA)-

    NVIDIA saw a major gain after reporting earnings. This would all fall down on the face of the earth in Thursday's trading session as the stock saw minimal gains. This company was probably the most watched earnings report of the earnings season. NVIDIA saw significant beats on both the top and bottom line in comparison to analysts expectations. The growth is astonishing as the company has seen AI demand take off. The new computing era is beginning with accelerated computing and generative AI platforms. NVIDIA makes a special chip that a lot of companies are feigning for. The company is currently limited by its advanced packaging system that is uses to produce the chips. It has significantly improved, but if they are able to ramp up the levels of production, there's no telling how much revenue can be generated from this product. The automobile market saw a slowdown due to the China market. Production of vehicles have slowed down a bit and has saw the demand for the automobile chips slip a bit. The gaming market has seen a bit of a recovery with better numbers coming compared to prior quarter and year. The guidance seems unrealistic at revenue of $16 billion coming in next quarter. If the company can achieve this, it will be phenomenal. I am rooting for this company and I think it will continue to be a major player as long as AI stays popular. The cyclical nature of the business may show indicators that now may be a good time to sell. I am going to ride this one a little higher and continue to test my luck. I love what I am seeing from NVIDIA. 

Snowflake Inc. (SNOW)-

    Snowflake saw a dive after reporting earnings for this Q2 of fiscal year 2024. The company beat on both the top and bottom line in comparison with analysts estimates. The revenue growth slowdown can be a main proponent to why the stock saw a decline after the earnings report. I think this as well as the slowdown in the retention rate made investors feel a sense of worry-some. Snowflake operates in a very competitive industry with some common competitors being Amazon and Microsoft. The uniqueness and accessibility of Snowflake data cloud product allows it to stand out from the other competitors. However, we will have to keep an eye out for the retention rate in the upcoming quarters to see if it is a recurring deceleration. On the bright side, cash from operations saw a 29% increase and customers spending over a million dollars saw a 62% increase. The customers continue to grow as well, as the company was able to grow the customer base by 25%. I think one thing that Snowflake needs to focus on is the profitability. I want to see them get to a profit point on a GAAP basis. They look to be doing the right things as spending habits have become more cautious due to the uncertainty in the economy right now. Overall, this will be a company that will thrive in the long-run if things continue operating in a sound manner. I think the valuation is sinking and investing in this stock is looking more and more attractive. 


Thank you for reading!

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