📈 Nvidia's Strong Quarter

Happy Friday!

Following a strong earnings report by Nvidia on Wednesday, the S&P 500 and the Dow Jones both spiked to record closing highs yesterday. The S&P 500 also saw its largest daily gain in 13 months.

I hope you all have a wonderful weekend as we continue to hit new 52-week highs across the board.

Some key data bites from this week that you should know: 

• Capital One $COF is set to acquire Discover $DFS in all-stock deal worth $35.3B.

• Home Depot $HD saw global same-store sales drop 3.5%.

• Goldman Sachs $GS raised its 2024 S&P 500 target to 5,200.

• The U.S. government will give $1.5B to build a new chip factory in New York.

• OpenAI has reached an $80B valuation.

• Ethereum $ETH has crossed $3,000 for the first time since 2022.

• Global debt has hit a new record high at a tremendous $313T.

In today’s newsletter:

• 🦾 Nvidia’s Earnings

• 💰 Top 10 Biggest Single-Day Gains

• ⚙️ Apple Doubles Down On Services

Let’s dive right in!

🦾 Nvidia’s Earnings

Nvidia’s earnings report was arguably the most anticipated this quarter, as the company stands at the forefront of the AI revolution.

And despite the high expectations, Nvidia surpassed both revenue and earnings estimates with its results.

Q4 FY24 Key Figures:

• Earnings: $5.16 (vs $4.64 Est. from LSEG, +486% YoY growth)

• Revenue: $22.10B (vs. $20.62B Est. from LSEG, +265% YoY growth)

• Data Center Revenue: $18.4B (+409% YoY growth)

• Gross Margin: 76.0% (+12.7 pts YoY)

• Research & Development: $2.46B (11.1% of total revenue)

• Cash on Hand: $25.98B (+95% YoY growth)

• Free Cash Flow: $27.02B (+610% YoY growth)

• Long-Term Debt: $8.46B (-13% YoY decline)

Investors were keen to see if Nvidia could sustain its tremendous momentum.

The company’s outlook and CEO Jensen Huang’s comments helped to assuage their concerns and reinforce confidence.

CEO Jensen Huang mentioned that, “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.”

For the current quarter, the company is expecting revenue to be at $24B, ahead of analyst estimates of $22.17B.

The key takeaway from this report?

Nvidia is experiencing robust growth across all its business segments, enjoying expanding margins, and accumulating more cash and free cash flow.

Additionally, its long-term debt is declining.

Looking ahead, the company anticipates continued growth in the near future.

Simply put, Nvidia is in a great position.

💰 Top 10 Biggest Single-Day Gains

Following Nvidia’s strong earnings, the company posted the biggest single-day market cap gain in history, adding nearly $280B in value.

What’s more astonishing?

Just 20 days before this milestone, Meta had set the previous record.

Following its Q4 2023 earnings, Meta added nearly $200B to its market cap, claiming the top spot at the time.

Despite having incredible returns last year, Nvidia and Meta continue to show that growth is still on the table.

Both companies have seen remarkable gains up +60% and +40% this year, respectively.

⚙️ Apple Doubles Down On Services

On Wednesday, Apple unveiled Apple Sports, a new app that provides users with real-time scores and stats across a variety of different sports.

This move is likely part of Apple’s strategic push to further enhance its services offering, providing a more personalized user experience.

Among Apple’s business segments, services stands out as the only area experiencing double digit revenue growth year-over-year.

In contrast, revenue from wearables, iPads, and Macs is on a decline.

Even the iPhone, Apple’s flagship product, has seen relatively modest year-over-year growth at just +2%.

📚 Recommended Reading

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Notable Companies Reporting Earnings Next Week:

• Monday (2/26):

  • Workday $WDAY, Oneok $OKE, Zoom $ZM

• Tuesday (2/27):

  • Lowe’s $LOW, American Tower $AMT

• Wednesday (2/28):

  • Salesforce $CRM, Snowflake $SNOW

• Thursday (2/29):

  • Anheuser-Busch $BUD, Autodesk $ADSK

• Friday (3/1):

  • RadNet $RDNT

All of the companies that are reporting earnings next week can be viewed here.

Buys

• Iovance Biotherapeutics ($IOVA)

  • Insider: Wayne Rothbaum (Director)

    • # of Shares Purchased: 5,000,000

    • $ Amount: $45,750,000

    • SEC Forms: [1]

• Gates Industrial Corporation ($GTES)

  • Insider: Neil Simpkins (Director)

    • # of Shares Purchased: 1,000,000

    • $ Amount: $12,200,000

    • SEC Forms: [1]

• Exelixis ($EXEL)

  • Insider: David Johnson (Director)

    • # of Shares Purchased: 190,000

    • $ Amount: $3,932,734

    • SEC Forms: [1]

Sells

• Amazon ($AMZN)

  • Insider: Jeffrey Bezos (Executive Chair)

    • # of Shares Sold: 8,008,057

    • $ Amount: $1,349,932,395

    • SEC Forms: [1], [2]

• JPMorgan ($JPM)

  • Insider: Jamie Dimon (Chairman & CEO)

    • # of Shares Sold: 821,778

    • $ Amount: $150,167,221

    • SEC Forms: [1]

• ServiceNow ($NOW)

  • Insider: Bill McDermott (Chairman & CEO)

    • # of Shares Sold: 30,489

    • $ Amount: $22,766,707

    • SEC Forms: [1]

🤝 Review of the Week

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