The firm obliterated expectations for both earnings per share and Revenue. In fact, revenue printed up 65.5% year over year. The firm's CEO Jensen Huang said, "We had a strong quarter with growth across every platform." Huang is not just blowing smoke. Take a look at some of these metrics, gang.
Gaming roared to a 68% increase. Professional Visualization (think AI, and VR) grew 22%. The Data-center? Oh just a 71% pop there. Even crypto-currency demand which had been downplayed was strong, in fact it was very strong. OEM and IP revenue grew by an astounding 148%. Crypto is not yet the reason why one would invest in this name, but is certainly part of the story, and can no longer be ignored.
Even the automotive segment showed some growth in revenue (+4%) despite the firm's intentional slowing down of it's own progress in that space. Did you see gross margins? Non-GAAP gross margins improved both on a yearly and sequential basis to an eye-popping 64.7%. On top of all of these goodies, Nvidia expects to return $1.25B to shareholders for the full 2019 fiscal year through dividends and share repurchases. There is literally nothing to dislike about these results except for the fact that the market may have largely priced them in ahead of the numbers.
I took a profit on 27% of my long position ahead of the close this past Wednesday at 256 and change. Given the way that the stock had behaved, I really felt that I needed to protect myself. Besides, my price target was 255, and you do have to respect your own homework. Yes, I told you that I was going to take off 30%. Such is the nature of doing math in your head. What now though? These guys are clobbering it, and I feel they are still clobbering the competition as well with the possible exception of Intel (INTC - Get Report) .
As you can see, even though the name spiked on Thursday, that the 254 level (which is key) is still in play. Should the shares recover from what has really been a mild overnight bout of profit taking, an honest breakout may have occurred. That said, should the shares open below 254, that spot will have to be retaken, and that will likely be a fight.
How I see it is this. In the event of a more significant risk-off move, the shares should see significant support at 240 today that rises to 245 by the end of the month. Anywhere close to that fan line, I am likely to buy back the shares that I sold on Wednesday.
New Target Price: 290, up from 255.
New Panic Point: 235, up from 210.