Notable that while Nasdaq biggies are showing some recovery from last year lows – NVIDIA has done very well on NVIDIA AI promise/earnings delivery – 3X returns in a year says something mkt is excited about
https://www.investors.com/news/nvidia-stock-2023-buy-now/#:~:text=In%20Q1%2C%20data-center%20sales,%2C%20Nvidia%20earnings%20fell%2025%25.
recent earnings –
https://www.investors.com/news/technology/nvda-stock-nvidia-smashes-estimates-on-strong-data-center-sales/
interesting to see there are only two partners listed in India under cloud service provider – as of now there seems exclusivity at “competency level”
As we can see NVIDIA AI & compute sub segment only partner is E2E networks – this needs to be validated if thats the lasting case and for how long. Nvidia story theme is on basis of Generative AI & compute power/scale.
High ebdita margins and high growth will attract competition – company didnt seem to have been challenged on defending these yet – tells some credibility in execution, company is not a innovation powerhouse, however a good distribution franchise(high growth biz like NVIDIA and other cloud providers etc) and solid execution can create meaningful scale given their tiny size and large opportunity.
Another point worth noting is the pivot from large ac concentration to de-risk biz, now to many small ac(Jabong used to be their main and large customer) – makes business model more resilient.
Capex intensity for growth and cashflows usually are key areas to watch out for. Management communication has seen some efforts, though lot more details need to be understood on growth strategy, product/service mix, op lvg etc
D – tracking
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