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Key Facts about Nvidia’s Financial Outlook
Nvidia (NASDAQ: NVDA) is set to report its Q3 earnings on November 19, 2023. The company reached a market cap of $5 trillion in 2023, making it the largest company globally. Nvidia’s revenue soared to $165 billion, reflecting a 1,000% increase over the past five years, with projections suggesting it could exceed $200 billion by 2026, driven by significant demand from partners like OpenAI, which has a $100 billion partnership with Nvidia.
Despite the promising revenue growth, Nvidia faces potential margin compression, with current gross margins slipping to 70%. Increasing competition from companies such as Amazon and Alphabet, which are developing their AI chips, could further pressure profit margins. Nvidia currently trades at a trailing P/E ratio of 54.5, indicating high future earnings expectations that may be difficult to meet if margins continue to decline.
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