[Click eStock] "NVIDIA, GPU 'Demand Growth' Expected to Weaken"

Q2 Earnings Expected to Exceed Estimates
Demand Growth More Important Than Earnings
Trend Toward Enhanced GPU Efficiency Increasing
Demand Growth Expected to Weaken Accordingly

[Image source=Yonhap News]

On the 29th, KB Securities emphasized that the increasing demand for AI semiconductor chips is more important than earnings for Nvidia. Although the Q2 earnings significantly exceeded market expectations, the weakening GPU demand is seen as a burden on the stock price.

Kim Ilhyuk, a researcher at KB Securities, stated, "The surprise strength is determined not by exceeding the median or average of market expectations, but by how much the guidance deviates from the expected range. In that regard, Nvidia's guidance did not deliver a big surprise."

Nvidia's Q2 (May to July) revenue was $30.04 billion, surpassing the market expectation of $28.7 billion. Earnings per share (EPS) were 68 cents, exceeding the market expectation of 64 cents. The guidance was within the market expected range. The Q3 revenue guidance was also presented at $32.5 billion, exceeding the market average expectation of $31.7 billion.

Researcher Kim analyzed, "Considering that the maximum value of the revenue guidance is as high as $37.9 billion, it did not greatly exceed market expectations," adding, "Expectations for Nvidia's growth are high, which puts pressure on the stock price."

Kim also said, "It is true that AI demand is strong, but from the market's perspective, what matters is the 'growth rate.' The year-on-year change rate of capital expenditure (CAPEX) by hyperscalers (M4) is expected to peak in Q2."

He continued, "Although the huge demand will continue, the growth rate of GPU demand is expected to weaken due to changes aimed at increasing GPU usage efficiency, such as the increased utilization of small and medium-sized LLMs (large language models)."

This content was produced with the assistance of AI translation services.