Intel stock has rallied sharply off earnings, thanks in part to optimism toward renewed demand in data center.
But the category still was a significant driver of Nvidia’s growth - and perhaps the most significant now that crypto demand has returned to more modest levels.Īnd the news here seems good, at least looking at the rivals in the data center space. They accounted for barely one-fourth of total revenue in the first half.
The cause has been an apparent “pause” in demand, as rival Intel (NASDAQ: INTC) told investors earlier this year.ĭata center sales aren’t as important as those in the Gaming category (which includes crypto-related revenue). In the first half of FY20, however, data center revenue has declined 12% year-over-year, per the 10-Q. But one of the less-covered aspects of Nvidia’s recent struggles has been a slowdown in the company’s data center business.īetween fiscal 2017 and fiscal 2019, Nvidia’s data center revenue grew a staggering 253%, according to figures in its Securities and Exchange Commission Form 10-K. The effect of the crypto bust has been a focus of many headlines surrounding Nvidia stock. And that suggests that Nvidia stock, despite those valuation concerns, can continue to rise. The second half of 2019, at least so far, is going almost exactly to plan.
That said, the gains in NVDA stock make some sense - and could continue.ħ Under-the-Radar Retail Stocks to Buy NowĪs I wrote back in March, Nvidia stock was a second half story. That earnings release looks potentially risky given the obviously building expectations. The bullish undertones understandably have traders leaning bullish into Nvidia’s number.I understand those concerns, particularly with Nvidia earnings on tap next week. From Advanced Micro Devices (NASDAQ: AMD) and Taiwan Semiconductor (NYSE: TSM) to Lam Research (NASDAQ: LRCX) and Applied Materials (NASDAQ: AMAT), gains were had across the board.ĩ Companies to Invest In as U.S.-China Relations Deteriorate With the sole exception of Intel’s (NASDAQ: INTC) disaster, traders cheered the performance of every other major name in the space. Since Nvidia is the last major semiconductor company stepping up to the earnings plate this quarter, we can glean some insight by analyzing how Wall Street responded to its peers. We’ll get into which strategy I prefer this go around in a moment, but first, let’s consider how the price action may be swaying traders into the number. My preference, instead, is to craft a volatility-based trade focusing more on how much we gap verses which direction. This is why I don’t advocate building big directional bets ahead of the coin flip. Sadly, the direction of the jump remains shrouded in mystery.
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