Nvidia Reported Strong Earnings — but Investors Should Keep Their Eyes on a Few Yellow Flags

In today’s video I look at Nvidia‘s (NASDAQ:NVDA) most recent earnings and share my thoughts on some bullish and bearish views on its earnings report. Here are some highlights from the video:

  1. Nvidia reported its second-quarter 2021 earnings after the market closed on Aug. 18. The company reported 68% year-over-year revenue growth and 15% sequential revenue growth. The increase in revenue was driven mainly by its record sales in its gaming and data center segments. 
  2. Guidance for the upcoming quarter is $6.8 billion in revenue, representing 44% YOY growth. Unfortunately, that means only low-single-digit sequential revenue growth, which may have some investors worried about Nvidia’s growth story. During the earnings call, management explained that one of the most significant issues for Nvidia is that its supply cannot keep up with demand. 
  3. In its balance sheet, Nvidia ended the quarter with $19.65 billion in cash, cash equivalents, and marketable securities, an increase of roughly $7 billion in one quarter. Due to longer lead times throughout the supply chain, Nvidia has also increased its outstanding inventory purchases and long-term supply obligations. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the premarket prices of Aug. 19, 2021. The video was published on Aug. 19, 2021.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/08/19/nvidia-reported-strong-earnings-but-investors-shou/

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