Motley Fool Money The NVDA Show
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Feb 22, 2024 Tim Beyers, a Motley Fool analyst, dives deep into Nvidia's recent blockbuster quarter, fueled by soaring demand for GPUs and AI advancements. He explores the sustainability of this growth amid potential slowdowns and critiques Nvidia's capital allocation strategy, questioning their focus on stock buybacks. The conversation highlights the company’s pivotal shift towards AI and networking solutions, emphasizing its transformation from merely a chip maker to a comprehensive tech enabler in the AI landscape, setting the stage for future innovations.
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NVIDIA's Growth
- NVIDIA's growth rates are not sustainable forever, and they will eventually slow down due to the law of large numbers.
- However, the high growth rates may persist longer than anticipated due to continued high demand.
Drivers of NVIDIA's Growth
- NVIDIA's current growth is driven by massive demand for GPUs for accelerated computing, outpacing supply.
- This high demand contributes to significant growth in accounts receivable, indicating potential for continued growth in the near term.
Monitoring NVIDIA's Performance
- Watch NVIDIA's inventory levels relative to revenue and gross profit growth.
- If inventory grows much faster than revenue or profit, it could indicate slowing demand and potential concerns.