{"id":112065,"date":"2021-11-19T10:00:00","date_gmt":"2021-11-19T15:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=112065"},"modified":"2023-01-19T17:37:48","modified_gmt":"2023-01-19T22:37:48","slug":"cloud-nine","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/stocks\/cloud-nine\/","title":{"rendered":"Cloud Nine"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-what-s-going-on\">What&#8217;s going on?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Nvidia&nbsp;<a href=\"https:\/\/www.cnbc.com\/2021\/11\/17\/nvidia-nvda-earnings-q3-2022.html\">reported<\/a>&nbsp;better-than-expected quarterly earnings earlier this week, and the US chipmaker sure is in bright spirits about its remarkably cloudy-looking forecast.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-this-mean\">What does this mean?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Nvidia made a name for itself by manufacturing graphics chips for gamers. That\u2019s still the biggest part of its business today, so it\u2019s a promising sign that the segment\u2019s sales grew 42% last quarter compared to the same time last year. But it was Nvidia\u2019s data center business \u2013 which sells cloud computing chips \u2013 that really impressed investors: its sales grew by a better-than-expected 55% last quarter. That helped boost the company\u2019s revenue by 50% to a record high of $7 billion. Nvidia seems optimistic about the future too, giving a higher-than-expected revenue forecast for this quarter. Investors didn\u2019t need telling twice: they sent its shares up 10%.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-should-i-care\">Why should I care?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>For markets:&nbsp;<\/em><\/strong><em>Nvidia\u2019s found its niche.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nvidia\u2019s share price has more than doubled this year, bringing its market value to around $800 billion. That\u2019s over three times as much as that of rival chipmaker Intel, even though Intel\u2019s yearly revenue is three times&nbsp;<em>higher&nbsp;<\/em>than Nvidia\u2019s. Investors, after all, value growth above all things, and Nvidia has that locked down: its chips are far better suited than Intel\u2019s to artificial intelligence, which is one of the fastest-growing areas of the cloud industry. That might be why Nvidia\u2019s quarterly revenue has grown by 56% on average over the last two years, versus Intel\u2019s measly 4%.<br><br><strong><em>Zooming out:&nbsp;<\/em><\/strong><em>Life isn\u2019t fair.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sweet results or no, Nvidia\u2019s probably a little bitter right now: the firm\u2019s been trying to acquire British chip designer ARM for over a year, but Europe&nbsp;<a href=\"https:\/\/www.cnbc.com\/2021\/10\/27\/nvidias-takeover-of-arm-faces-in-depth-investigation-in-europe.html\">opened<\/a>&nbsp;a potentially deal-scuppering investigation into the transaction last month. And it wasn\u2019t done there,&nbsp;<a href=\"https:\/\/www.reuters.com\/world\/europe\/eu-could-clear-state-aid-chip-production-amid-global-shortage-2021-11-18\/\">saying<\/a>&nbsp;this week that it\u2019s also looking to subsidize European chipmakers in a bid to ease the supply crisis \u2013 a move that would give them an unfair advantage over non-European chipmakers like Nvidia.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8212;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Originally Posted on November 18, 2021 &#8211; <a href=\"https:\/\/www.finimize.com\/wp\/news\/cloud-nine\/\">Cloud Nine<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nvidia reported better-than-expected quarterly earnings earlier this week, and the US chipmaker sure is in bright spirits about its remarkably cloudy-looking forecast.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[6,8,9,22,26,3],"tags":[8235],"contributors-categories":[13597],"class_list":["post-112065","post","type-post","status-publish","format-standard","category-north-america","category-region","category-securities","category-stocks","category-text-articles","category-traders-insight","tag-nvidia","contributors-categories-finimize"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Cloud Nine | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"Nvidia reported better-than-expected 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