Nvidia record earnings, Snowflake sees slow growth, Best Buy beats – Yahoo Finance
Myles Udland, Brian Sozzi, and Julie Hyman break down Thursday’s early movers, including: Nvidia booking $155 million in revenue from crypto mining cards, Snowflake raising full-year guidance, and Best Buy seeing sales jump.
JULIE HYMAN: Well, just about four minutes until the opening bell, and we are watching a number of earnings movers this morning. Nvidia, as you can see, is one of them. The stock is up just about a quarter to a third of 1%. So not moving much this morning, even though it put up some pretty big numbers. As you can see there, the company’s earnings and revenue beating estimates.
The focus for Nvidia, at least on the part of investors, seems to be on its crypto mining chips. And it’s really an interesting dynamic here, because the company sold on $155 million worth of its brand new dedicated crypto mining chip. And it forecasts more than double that, about $400 million in revenue from that chip in the current quarter. But it sort of has this reluctant relationship with the crypto business.
And in fact, Jensen Huang, the CEO, said in some interviews yesterday after the earnings, that they’re trying to make their gaming chips, which is their main business, in such a way to make them less attractive to crypto miners, because they want to make sure that they have enough chips for their gaming business. They also have a big data center business. So Brian, it’s really kind of an interesting dynamic here, what has been a really hot area, that Nvidia is sort of cautious on.
BRIAN SOZZI: Yeah, you put it perfectly, Julie. Nvidia always has had this tense relationship with crypto, because they don’t want to be viewed as the crypto stock. They don’t want to get, see their stock and all the volatility, when Bitcoin volatility is happening, they don’t to see their stock going all over the map. But they do do other things outside of selling mining type equipment, which as you mentioned, they’re looking to sell $400 million of that hardware in this quarter compared to $150 million in the first quarter.
And their gaming business was up 106%. They noted strength in laptops. I think you have HP reporting after the close today. I’d be surprised if HP doesn’t put up a very good quarter just looking through what Nvidia had to say yesterday, Myles.
JULIE HYMAN: Yeah, definitely interesting.
MYLES UDLAND: Yeah.
JULIE HYMAN: Sorry, go ahead, Myles.
MYLES UDLAND: Go ahead, Julie, you got it.
JULIE HYMAN: I was going to take it to Snowflake as well, because that’s another company that reported after the close that has been a high flyer that’s not necessarily reacting so well to earnings. So Snowflake coming in and saying product sales are going to grow more slowly in its current quarter, and expectations have been pretty lofty for this company.
Remember, it was last year’s biggest public offering. Revenue actually more than doubling in its fiscal first quarter, coming in above what analysts have been anticipating. Lost a little bit wider than estimated, but it sounds like it’s that slowing growth, Myles, that is responsible for some of the disappointment here.
MYLES UDLAND: Yeah, I mean growth slowing to about 87%. I think the range is 84% to 87% for the full year coming off of the current quarter or the most recent quarter, where you had 110% growth. And look, the company is looking for revenue to be just over a billion dollars in its fiscal 2022. Over the last four quarters, it has had revenue in excess of a billion dollars.
Company’s market cap, as I see it right now on Yahoo Finance, is $68 billion. So still trading at 68 times next year’s revenue, which is a very rich multiple. Now this is a large enterprise that is still growing. Again, as we just said, in excess of 80%. And you can sort of make the math work. I mean, its adjusted free for last quarter was $23 million. OK, we can get through some of the one time stock-based expense stuff, we can talk about the runway, the visibility as it were, that they have. But it’s still an extremely expensive stock, and that’s why the Snowflake shares have just about been cut in half from their highs.
All right, seeing live pictures here from the floor of the New York Stock Exchange as we get today’s trading session underway.
FIGS ringing opening bell down there on the floor. I remember FIGS, their subway ads. It’s like cool scrubs. But you know, obviously scrubs not a part of my wardrobe. You see folks down there, see the folks down there ringing the bell, ringing the bell on this Thursday morning.
JULIE HYMAN: Yeah, remember in the before times, we had all the, like you guys, as New York City denizens, will also recall all of these companies that advertised in the subway, right? I called them subway startups. FIGS was one of them. HIMS, if you recall–
BRIAN SOZZI: Dr. Zizmor.
MYLES UDLAND: Yeah.
JULIE HYMAN: –had some eye-catching ads. All of them in similar sort of new way fonts and things. And now some of them are finally coming public.
BRIAN SOZZI: Julie, true story. I almost bought myself some stuff from FIGS. I mean, it looks cool. Like, obviously, I’m not a doctor or a nurse, it just looks really nice. I kind of want to wear it for whatever reason.
MYLES UDLAND: Guys, one day, one day I want to see you do the show in scrubs, just because you’re like, I like the fit.
BRIAN SOZZI: Yeah, it just looks like nice, it’s like Lululemon for doctors. The stuff looks cool.
JULIE HYMAN: And by the way, the CEOs are going to be on at 11:30 today. So we’ll see if Akiko and Zack bust out some scrubs for that interview. Finally though, I just want to talk about some more earnings that we’re watching here this morning. Best Buy is one of the companies was out. Retailers, so I know that you’re watching that one. Soz. And the company out and raising its full year comparable sales forecast. What stands out to you from Best Buy?
BRIAN SOZZI: Outside of the very strong quarter outlook, same store sales or what they call enterprise comparable store sales, a mouthful there, up 37.2%. I mean, their online business very strong in the US, up 38%. What really stood out to me is the performance in terms of same store sales by category. I’m locking in on appliances. Appliance same store sales up 66.6% year over year in the US.
That’s on top of strong gains really for the past two or three years. So to put up that type of increase on that type of stack, as Myles would say, is very impressive. And look, we’ve talked to the folks at Whirlpool before. They’re seeing strong demand. It looks as though that has continued because of what we’ve seen in the housing market. Really, the housing market has remained strong.