Thrive Capital Invests $1 Billion in OpenAI at $285 Billion Valuation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
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Should l Buy NVDA?
Source: Newsfilter
- Investment Scale: Thrive Capital invested approximately $1 billion in OpenAI at a valuation of $285 billion in December, demonstrating its ongoing confidence and support for the artificial intelligence sector.
- Funding Rounds: This investment is separate from OpenAI's ongoing funding round, which could exceed $100 billion and potentially elevate the company's valuation to $800 billion, indicating strong market expectations for OpenAI's future growth.
- Long-term Partnership: As one of OpenAI's major investors for several years, Thrive Capital has established a deep partnership with the company, reflecting its strategic vision and commitment in the AI space.
- Future Investment Potential: Thrive Capital is likely to participate in OpenAI's current funding round, further solidifying its investment position in the sector, while OpenAI seeks support from strategic investors like Nvidia, SoftBank, and Amazon to ensure the smooth progress of the financing.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 195.560
Low
200.00
Averages
264.97
High
352.00
Current: 195.560
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Software Stocks Rise: In stark contrast to Nvidia's performance, software stocks saw broad gains, with the iShares Expanded Tech-Software ETF rising 2.2%, potentially linked to CEO Jensen Huang's optimistic comments about the software market.
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See More
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See More
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Market Segments Growth: The company experienced significant growth across critical markets, particularly in data centers, automotive, and gaming, with data center revenue accounting for over 90% of total revenue and growing by 75% year-over-year.
Future Projections: Analysts project continued strong performance for NVIDIA, forecasting $78 billion in revenue for Q1 FY 2027, reflecting a 14.7% sequential increase and a 77% year-over-year growth, excluding China.
Investor Sentiment and Stock Outlook: Analysts maintain a bullish outlook on NVIDIA's stock, with a consensus target price suggesting significant upside potential, supported by strong cash flow and a healthy balance sheet, positioning the company well for future growth.
See More
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- Strong Performance: Nvidia reported an adjusted earnings per share of $1.62 for the quarter ending January 25, with revenue soaring 73% year-over-year to $68.13 billion, significantly exceeding Wall Street's forecast of $65.91 billion, indicating robust market demand and execution.
- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
See More
Analysts Claim Nvidia is Massively Undervalued
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
See More
Nvidia's Earnings Beat Expectations but Shares Decline
- Strong Earnings Report: Nvidia reported $68.1 billion in fiscal Q4 revenue, a 73% year-over-year increase that surpassed the market's expectation of $65 billion, highlighting its strong demand and leadership in the AI sector.
- Profitability Surge: Earnings per share soared 98% year-over-year to $1.76, reflecting significant profit growth in the rapidly expanding AI market, although the stock price declined due to investor concerns about the AI investment cycle.
- Reduced Share Buybacks: Nvidia's stock repurchase spending fell to less than $4 billion in fiscal Q4, down from $7.8 billion in the same quarter last year, indicating a cautious stance on the attractiveness of its current stock price.
- Deceleration in Data Center Growth: While data center revenue grew 75% year-over-year to $62.3 billion, the sequential growth rate decreased from 25% to 22%, suggesting that market demand may be nearing its peak, raising investor concerns.
See More
Nvidia Reports Strong Earnings but Stock Drops
- Strong Earnings Report: Nvidia's latest earnings report exceeded market expectations, with both revenue and net income surpassing analyst forecasts; however, the stock fell 5.5% at Thursday's open, indicating complex market sentiment.
- Volatile Market Reaction: Despite a 3% after-hours gain, Nvidia's stock quickly reversed course, reflecting investor concerns in the semiconductor sector, as evidenced by the 3.3% drop in the VanEck Semiconductor ETF on the same day.
- Software Stocks Rise: In stark contrast to Nvidia's performance, software stocks saw broad gains, with the iShares Expanded Tech-Software ETF rising 2.2%, potentially linked to CEO Jensen Huang's optimistic comments about the software market.
- Investor Sentiment Shift: Given the unusually high valuation ratio between chip and software stocks, investors may rotate between these sectors, although Nvidia remains a dominant player in the AI chip market with strong growth potential ahead.
See More
Nvidia's Earnings Beat Expectations but Shares Decline
- Significant Revenue Growth: Nvidia reported $68.1 billion in fiscal Q4 revenue, a 73% year-over-year increase that surpassed the expected $65 billion, driven primarily by a 75% rise in data center revenue to $62.3 billion, indicating robust market demand for AI computing.
- Earnings Per Share Surge: The company's Q4 earnings per share soared to $1.76, nearly doubling with a 98% year-over-year increase, showcasing strong profitability, although the market's muted reaction may reflect investor concerns about nearing the peak of the AI investment cycle.
- Moderated Share Repurchases: Nvidia's share repurchase spending fell to under $4 billion in Q4, down from $7.8 billion a year earlier, suggesting a cautious approach to current stock valuations, which could impact investor confidence moving forward.
- Deceleration in Data Center Growth: Despite strong overall revenue, the sequential growth rate in the data center segment decreased from 25% in Q3 to 22% in Q4, with first-quarter revenue guidance indicating further slowdown, potentially signaling a cooling off in the AI investment boom.
See More
