Nvidia set to Report Wednesday

In partnership with

Welcome to offtheticker - thanks for following along. This week we will be continuing our weekly Monday morning reports with the stocks that we are watching before earnings and where we currently see these stocks going post earnings, as well as our personal trading thesis around these calls, which is not financial advice. This is a very eventful week, not because there are a ton of companies that we will be keeping an eye out on earnings, but because the biggest company in the world is reporting earnings this week. Nvidia has been a powerhouse over the last 5 years, becoming the leader of the picks and shovels of the AI boom. We will also be taking a look at two other companies that we are not a fan of ahead of earnings and want to warn our followers who may be invested in these companies.

Nvidia

NVIDIA is expected to report for the quarter with consensus revenue around US$54.8 billion and adjusted EPS of roughly US$1.25, which would represent a 56% year-over-year growth respectively. Much of the upside comes from continued demand in its data-center segment, where chips like the Hopper/Blackwell, which are the two newest GPUs are gaining traction. This is going to be a huge telltale sign if the revenue for the picks and shovel companies like Nebius, Iren, TSMC and others we have highlighted that we are invested in to see if they could grow.

Guidance is the most important thing that investors look for when we speak about Nvidia earnings. The markets will focus on how NVIDIA describes future demand for AI accelerators, how inventory levels are in hyperscale customers, and whether custom-chip competition is starting to bite. Recently we have seen companies like AMD and Broadcom continue to make headlines for trying to compete with Nvidia, which will directly impact the company’s revenue moving forward if they may have to lower prices to compete with these other two growing giants.

On the news front, where we expect Jensen to speak during the earnings call, the biggest thing that we are looking for is any news on China revenue possibly becoming a thing. As many who have followed the stock know that any announcement on possible China revenue could be massive for the company. This is unlocked a multi-billion-dollar industry, and the second biggest market in the world, that Nvidia is currently not pricing in any revenue. China has historically accounted for almost 25% of Nvidia’s data-center revenue before export controls tightened, so even a partial reentry could unlock billions in incremental annual revenue.

Other things that we are looking for is any announcement of new large customer wins (possibly Nebius, TSMC and others), supply-chain constraints (which could bring light other bottlenecks that the company is seeing that could impede on future growth), or a possible announcement of a new generation of chips.

The options market is already pricing in a potential move of 8% direction around the print. We also want to warn our newsletter readers that smaller Ai companies could see even bigger moves based on possible news, with many of these companies so heavily dependent on the guidance of the tech giant.

Our Investment Thesis

We continue to be holders of Nvidia, as it is the leader of this AI boom, and has seen steady growth over the last 10 years, and it’s hard to bet against such a massive company. Depending on how risk adverse you are, we think that using the strategy that Softbank has used is something that we are also going to be doing. Recently, Softbank sold all of its Nvidia stock, not because they are not optimistic about the stock, but because there are many other smaller companies that may see much bigger gains over the next couple of years. The CEO of Softbank explained that the divestment “allows us to provide a lot of investment opportunities … while maintaining financial strength.” They sold over 5.8 billion dollars of Nvidia stock, and we will be closely looking at how they begin to allocate all of this cash. The biggest winner of this reallocation of cash for Softbank may be a company that we have also released a newsletter on, which is Oracle, who is building 5 new data center sites within the US over the next couple of months in a project called the “stargate” project.

Overall, we think that it is smart to hold Nvidia stock, which has recently received stock price predictions from Goldman Sachs of $240, which is almost a 50$ gain in the stock price, but we are keeping our eye on where these major banks are reallocating their money to smaller cap companies that could see the next big boom like we have seen from Nvidia. We are not fazed by how the market reacted last week to the combination of the Michael Burry short and the Softbank reallocation, and we are overall still bullish on the market.

Klarna

Klarna is set to report its first post-IPO earnings with revenue projected at about US $889 million for Q3, representing 26% year-over-year growth with its service and transaction revenue expecting to reach $627 million, while interest income is forecast to surge 51% to $263 million. The biggest problem that most companies face after they first IPO is their ability to continue to scale at the same rate that they were able to when they were a private company. When companies become public, they now have to appeal to investors, and the board of directors needs to approve of every move. This is some of the reason that most companies that IPO see a fall for a couple years after an IPO because of this slowed down growth while the company can gain traction under this new form of management. Klarna is a company that we can see having the same type of share price movement. The stock is currently below the price that it originally IPOed at, which has been a consistent fall over the last couple of months. Key eyes will be on Klarna’s guidance for full-year 2025 and hoping that the company could continue to beat earnings even with the recent IPO. investors will be looking at growth in its U.S. business and expansion into new markets, performance of its pay later loans and delinquency/credit loss trends, and any mention of any regulatory issues could further drop the stock.

Our Investment Thesis

We usually see recent IPOs as a pump and dump right after they reach the public market, and Klarna is a prime example. As we explained earlier, we think the company will see a slowdown of revenue and guidance moving forward due to the more strategic moves they now need to take which will please shareholders for the long term, which may mean taking less risk and borrowing less debt. We think that the overall business idea of Klarna is a great one, although in our eyes not morally correct, the world is becoming more expensive and people are spending more money on things they don’t need, and Klarna could take advantage of this. We expect the stock will continue to fall, but once the stock catches its footing and sees a couple months/years of flatline, could start to make a move up, just like we have seen from many great companies. We will be continuing to look at news on the stock and are hoping they build on digital products like credit cards, which will make their service more easily accessible. For now, we are holding off, but long term this company could be a major winner in the banking space.

The Simplest Way to Create and Launch AI Agents and Apps

You know that AI can help you automate your work, but you just don't know how to get started.

With Lindy, you can build AI agents and apps in minutes simply by describing what you want in plain English.

→ "Create a booking platform for my business."
→ "Automate my sales outreach."
→ "Create a weekly summary about each employee's performance and send it as an email."

From inbound lead qualification to AI-powered customer support and full-blown apps, Lindy has hundreds of agents that are ready to work for you 24/7/365.

Stop doing repetitive tasks manually. Let Lindy automate workflows, save time, and grow your business

Get $20 Worth of Free Credits

CTV ads made easy: Black Friday edition

As with any digital ad campaign, the important thing is to reach streaming audiences who will convert. Roku’s self-service Ads Manager stands ready with powerful segmentation and targeting — plus creative upscaling tools that transform existing assets into CTV-ready video ads. Bonus: we’re gifting you $5K in ad credits when you spend your first $5K on Roku Ads Manager. Just sign up and use code GET5K. Terms apply.

Use code GET5K now