Editor’s note: This article is from the micro-channel public number “Wall Street Research Society” (ID: meigushe), Author: US stocks little helper, 36 krypton release authorized.After the U.S. stock market on February 14, Beijing time, chip giant Nvidia announced its Q4 fiscal year 2020 financial report.Data show that during the period, revenue was US $ 3.11 billion, a surge of 41% year-on-year, an increase of 3% month-on-month, and exceeding market expectations of US $ 2.97 billion; net profit of US $ 950 million, a surge of 68% year-on-year, better than market expectations of US $ 830 million.The revenue and profit doubled the market expectations, pushing its stock price after the market rose over 7% to 288.14 US dollars, breaking the 52-week high.It was not easy to achieve the expected performance of revenue and net profit in the fourth quarter. After all, Nvidia’s revenue and net profit showed a year-on-year decline in the last quarter.According to this new financial report, we can see that the graphics chip giant NVIDIA’s revenue is gradually recovering, which is related to its strong game revenue and record sales of hardware used in artificial intelligence computing big data centers. We will explain in detail below.Here.However, we should also see that Nvidia itself is in a challenging competitive environment. In the fourth quarter, rivals Intel and AMD achieved net revenues that exceeded market expectations.In addition, we also noticed that Intel reduced its revenue forecast for the next quarter by US $ 100 million, but it was still higher than analysts’ expectations, which is related to the current epidemic.You know, according to regulatory data, 24% of Nvidia’s revenue in 2019 will come from China.The domestic epidemic will also adversely affect Nvidia’s data center, smart car and gaming businesses in the coming quarters.So, from this financial data, what value points can we discover?Net revenue doubled market expectations. Data center business surged 43%, a new record revenue. The financial report shows that in the fiscal quarter ended January 26, 2020, Nvidia’s revenue was $ 3.105 billion, compared with the same period last year.An increase of 41% compared to US $ 2.205 billion and an increase of 3% compared to US $ 3.014 billion in the previous quarter. This performance also exceeded analysts’ general expectations of US $ 2.97 billion.Able to return to its peak after four consecutive quarters of revenue decline, in addition to the gaming business, Nvidia’s data center business has made a significant contribution.Nvidia said that the upper and lower limits of performance guidance exceeded analysts’ expectations because data center revenue hit a record in the previous quarter, mainly due to a rebound in demand caused by the worries about the global economic downturn.In the quarter, the revenue of the data center sector was US $ 968 million, a record high in the company’s history, which increased by 33% month-on-year and 43% year-on-year; the revenue of the largest gaming sector was US $ 1.491 billion, decreased by 10% month-on-month and increased 56% year-on-year, but less thanMarket expectations are $ 1.53 billion.The revenue of the professional visualization department was US $ 331 million, an increase of 2% month-on-month and an increase of 13% year-on-year, in line with expectations.Revenue from the automotive segment was US $ 163 million, an increase of 1% from the previous quarter, and was less than market expectations of US $ 173 million.Revenue from OEM and other divisions was US $ 152 million, an increase of 6% month-on-month and 31% year-on-year.In the quarter, Nvidia’s strong revenue growth has driven the company’s net profit.In the fourth quarter, excluding certain one-time items (not in accordance with US GAAP), adjusted net profit was US $ 1.172 billion, an increase of 136% compared to US $ 496 million in the same period last year and 1.103 billion in the previous quarterThe US dollar increased by 6%; US GAAP was US $ 950 million, a 68% increase year-on-year, better than market expectations of US $ 830 million; adjusted diluted earnings per share were US $ 1.89, compared with US $ 0.80 in the same period last yearThat’s an increase of 136%, an increase of 6% from the previous quarter’s $ 1.78, and exceeded analysts’ consensus expectations of $ 1.67.Let’s look at the gross profit margin again. In the quarter, the gross profit margin under GAAP was 64.9%, an increase of 130 basis points month-on-month, and an increase of 1020 basis points year-on-year; the non-GAAP gross profit rate was 65.4%, an increase of 130 basis points, and an increase of 940 basis points year-on-year.Despite better-than-expected revenue and net profit growth, operating expenses for the quarter also continued to grow.This does not rule out that Nvidia has paid a high cost in the market competition as the price.Data show that during the quarter, Nvidia’s operating expenses were US $ 1.025 billion, an increase of 12% compared with US $ 913 million in the same period last year, and an increase of 4% compared with the previous quarter’s US $ 889 million.Regarding the performance guidance for the next quarter, Nvidia said that considering the impact of the epidemic in China, it lowered its revenue target of US $ 100 million to US $ 3 billion, but it was still higher than market expectations.In view of Nvidia’s dazzling financial data, the stock price surged about 7% after the market, breaking the 52-week high.Over the past 52 weeks, Nvidia’s highest price was $ 273.48 and its lowest price was $ 132.6.However, the most important thing is how long can Nvidia’s rising trend be maintained. The increase in revenue in a single quarter may not fully prove that its turning point has come. After all, in the past four quarters, Nvidia’s revenue has continued to decline..In addition, NVIDIA’s strong rivals are now entering its graphics card market, such as Intel and AMD.The game business increased 56% year-on-year, less than the market expects the slowdown of the game business under the background of the PC game’s slowdown. As Nvidia’s largest gaming sector, its fourth-quarter revenue surged 56% year-on-year to 1.491 billion US dollars, but fell 10% from the previous quarter%, And less than market expectations of 1.53 billion US dollars.Data from the last quarter showed that Nvidia’s game business revenue was US $ 1.66 billion, and it has already appeared on the basis of a year-on-year decrease of 6%.Therefore, although the growth rate of the game business reached 56% this quarter, in fact, the higher market expectations also indicate that Nvidia’s game business is likely to go downhill.This also has a lot to do with the current game environment.We know that Nvidia started out as a graphics card for gaming, and in recent years, PC games’ global market share has been gradually squeezed by other game manufacturers.With the rise of mobile mobile games, most players are also moving from PC to mobile.According to the statistics company Newzoo’s “Global Game Market Report 2019”, in the next few years, the PC-side game market share will continue to shrink before 2022, and mobile games will exceed the PC-side revenue and exceed the revenue growth of console games., Page games will continue to decline.Obviously, this trend in the gaming business is negative for Nvidia.Through Nvidia’s recent move to launch cloud gaming platform GeForce Now, we can see that Nvidia is looking for more games that cater to players in the current environment of PC gaming.This is undoubtedly worthy of recognition, but it also reflects the anxiety behind Nvidia.And just one week after the cloud gaming platform was in danger, bad news came. Activision Blizzard, the world ’s largest game developer, announced that all games would be withdrawn from Nvidia ’s GeForce Now cloud gaming service.In addition, it is worth mentioning that the Chinese market is an important area for Nvidia ’s gaming business. Now, in addition to facing the Chinese market, which has weakened the market ’s demand for the company ’s mid-range gaming graphics cards due to the economic slowdown, there is an outbreak at the moment.Will have an adverse impact on them.Behind the MX 350 series of mobile graphics “shoulders”, Nvidia’s operating expenses have been rising not long ago. The exclusive news of foreign media NoteBookCheck said that NVIDIA will launch the MX 350 series of mobile graphics cards in the first half of the year.An MX GPU based on the Turing architecture, which will be released later this year, to compete with Intel’s Xe DG1 alone.Prior to this, Nvidia will also launch the MX330 and MX350 alone.We see Intel enter the graphics market with high profile, which means that Nvidia has another strong rival in the graphics field.In fact, in the past year, AMD has also challenged the entire PC market. After pursuing Intel for a while, it has even turned its attention to the graphics card market to compete with Nvidia.Just before entering 2020, Nvidia and AMD turned into a price war.AMD released this year’s latest graphics card-Radeon RX 5600 XT at CES early this year.This is a graphics card that supports 1080p, which can improve the high frame rate of games. It is specially made for gamers. It points directly to NVIDIA ’s earlier RTX2060, and AMD has set the price for a better market.At 279 US dollars, Nvidia had to respond to the sudden pressure to cut prices.In the face of competitive pressure, Nvidia’s next-generation MX graphics card is naturally given more expectations, but whether it can break through and occupy a suitable market height in the fierce competition is still an open question.But it is precisely because of the cruel market competition that Nvidia has also paid not low revenue expenses.This quarter’s financial report shows that during the period, Nvidia’s operating expenses were US $ 1.025 billion, an increase of 12% compared with US $ 913 million in the same period of the previous year, and an increase of 4% compared with US $ 989 million in the previous quarter.Not in accordance with US GAAP, Nvidia ’s adjusted operating expenses for the fourth quarter were US $ 810 million, an increase of 7% compared to US $ 755 million in the same period last year, and an increase of 5% compared to US $ 774 million in the previous quarter.We see that Nvidia’s operating expenses have increased to varying degrees, both year-on-year and month-on-month.With Intel and AMD successively entering the graphics card market, in order to cope with their new products and marketing strategies, Nvidia’s marketing and research and development expenses will continue to rise.What role does the data center business play behind the chip giants ’financial reports exceeding market expectations?As of now, the Q4 financial reports of the three chip giants Intel, AMD and Nvidia have all been announced.It is not difficult to find through the three financial reports that their Q4 revenues have exceeded market expectations.The Intel Q4 financial report shows that revenue during the period was 20.2 billion US dollars, higher than market expectations of 19.22 billion U.S. dollars; net profit was 6.9 billion U.S. dollars, which was also higher than market expectations of 5.498 billion U.S. dollars.And AMD’s Q4 financial report shows that revenue during the period was 2.13 billion US dollars, an increase of 50% over the same period last year of 1.42 billion US dollars, higher than analysts expected 2.11 billion US dollars.Nvidia’s Q4 revenue was US $ 3.11 billion, higher than market expectations of US $ 2.96 billion; net profit surged 68% year-on-year, better than market expectations of US $ 830 million.Behind these three dazzling financial reports, the data center business has played an important role.Intel’s Data Center Group (DCG) performed extremely well in the fourth quarter.During the period, Intel ’s data center business sales reached US $ 7.21 billion, a year-on-year increase of 19%.In the case of Intel’s focus on this business, especially after the acquisition of Habana Labs, this business may continue to grow for a period of time.Although AMD did not clearly indicate the specific revenue figures brought by the data center business in the financial report, this part was merged into the embedded and semi-custom business. In fact, AMD’s embedded and semi-custom business was weak, but EPYC was inThe enterprise market is becoming more prominent.You know, AMD ’s business declined 14% year-on-year while its operating income increased 61%, which actually reflects the strength of AMD EPYC.Last month, the original Intel FPGA was responsible for joining AMD, which was mainly responsible for the data center business. It can be seen that AMD attaches great importance to the data center business.In the fourth quarter, Nvidia’s data center business revenue was US $ 968 million, a record high in the company’s history, an increase of 33% from the previous quarter, and an increase of 43% from the same period last year. Its revenue accounted for 31%.In the whole year of 2019, data center revenue was US $ 2.983 billion, which also set a record high.In the past year, Nvidia’s full-year data center business has benefited from the recovery of large-scale computing and the AI revolution in more and more vertical industries.NVIDIA T4, V100 graphics Q4 shipments and revenue again set a record.Among them, the shipment of T4 graphics cards, which are mainly used for inference, increased 4 times year-on-year.Although Nvidia’s current US $ 968 million is no less than Intel’s US $ 7.21 billion, but benefiting from the recovery of large-scale computing in the industry, in the view of the US Stock Research Institute, Nvidia’s position in the GPU data center market is relatively stable.After all, compared to AMD, Nvidia’s influence in the GPU market is currently much stronger.Since the third quarter of fiscal 2020, Nvidia has announced several major news in the data center, including the first scalable GPU-accelerated supercomputer in the cloud with Microsoft Azure; Alibaba and Baidu recommendation engines use Nvidia GPUsThe efficiency is improved by an order of magnitude compared to the CPU; in cooperation with Arm, Ampere Computing, Fujitsu, and Marvell, a new reference design platform for GPU-based Arm-based servers has been developed, and Red Hat has partnered with Red Hat to apply Arm’s GPU acceleration to HPCapplication.In addition, Nvidia is also working on edge computing. Last November, it launched the ultra-small edge AI supercomputer Jetson Xavier NX. At present, the new Jetson family has four products.This means that after taking the leadership position in cloud training, NVIDIA is strengthening the competitiveness of cloud reasoning and edge-side reasoning.In general, with the promotion of AI + 5G, the data center business is becoming a battleground for major chip giants and technology companies, and they will all benefit from the future trend of big data on the cloud. Obviously, this is also a future creationAn important source of revenue.As chip giants continue to invest in data center business, it is inevitable that revenue will increase.From the perspective of the entire data center market, the development space is extremely huge, and each data center business is still expected to continue to rise.The impact of the epidemic on Nvidia is unavoidable. Immunization has broken out in many places in the country. Many multinational companies including Apple and Tesla have been affected. Cook even said on a conference call that the manufacturing base in China is mainly China.Apple may face production disruptions.In this financial report, NVIDIA said that it is not clear what the impact of the new coronavirus epidemic will be, but because China is the main market for gaming and data center chips, it lowers its revenue forecast for the next quarter by $ 100 million to $ 3 billion.US dollars.However, the revised figure is still higher than analysts’ expectations of $ 2.97 billion.The Chinese market is very important for Nvidia. In the past year, 24% of Nvidia’s revenue came from the Chinese market.”China accounts for about 30% of Nvidia’s largest gaming business,” said Colette Kress, chief financial officer of Nvidia, in a conference call with investors. “Nvidia’s gaming GPU sales share in China is very high, and the epidemic is expected to weaken it.Profit outlook for the next fiscal quarter.As the biggest source of Nvidia’s sales, although the game business in the fourth quarter increased 56% year-on-year, it still fell short of analysts’ expectations.Then, under the influence of the epidemic, the gaming business will be the first to suffer adverse effects.Data centers and smart car businesses may also be affected.Conclusion: Generally speaking, the Q4 report card produced by Nvidia is very eye-catching.Not only the revenue and net profit are better than expected, but even in the face of the epidemic in the important market of China, the revenue target is still lower than expected, which shows Nvidia’s strong market fighting power.However, in the face of strong opponents, we still cannot relax. Nvidia still needs to continuously develop new products to meet market demand and respond to the pursuit of opponents.Of course, Nvidia founder Huang Renxun also stated in the financial statement that in addition to traditional game chips, the company also has new opportunities in graphics and cloud gaming.Nvidia’s AI technology has also made breakthroughs in the fields of natural language learning, AI context communication, and recommendation engines, which are the core algorithms of the current Internet.At the same time, Nvidia said it has the ability to make a huge impact in 5G, genomics, autonomous driving, robotics and other fields.Under the guidance of the strong financial report in the new quarter, whether Nvidia can continue the optimistic trend of this financial report, the US Stock Research Institute will continue to pay attention..
Q4 Revenue and net profit both exceeded market expectations. Nvidia’s “resurrection”?
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