Lunar Capital Weekly Roundup
| Index / Fund / Rate | Start of Year | Last week | This Week | % change YTD |
|---|---|---|---|---|
| JSE ALSI | 73 723 | 67 575 | 70 485 | -4.39% |
| NASDAQ Composite | 15 833 | 11 354 | 12 131 | -23.38% |
| S&P 500 | 4 797 | 3 901 | 4 158 | -13.31% |
| Prime Lending Rate | 7.25% | 8.25% | 8.25% | 13.79% |
| Lunar BCI WW Flexible Fund | 165.68 | 138.77 | 139.50 | -15.80% |
| USD/ZAR | 15.96 | 15.85 | 15.60 | -2.26% |
| EUR/ZAR | 17.95 | 16.73 | 16.75 | -6.69% |
Source: iress
Company and Market News
Nvidia Focus
Nvidia’s Q1 2023 results were released last week, beating analyst expectations. However, Nvidia decreased guidance expectations for Q2. The primary reasons are that China is still under strict lockdown which affects their sell-through rate. Nvidia has also stopped selling products in Russia which has an important gaming market.
Nvidia, a pioneer of the GPU-accelerated computing, develops graphical processing unit (GPU) based computer chips and solutions for the gaming, professional visualization, data centre, and the automotive industries. Nvidia is attempting to redefine computer graphics, high-performance computing, and Artificial Intelligence.
For FY 2022, Nvidia’s revenue was $26.9 bl. Gaming accounted for 46.3 percent of revenue and data centres accounted for 39.4 percent. Professional visualization, automotive, OEM and other accounted for the remaining 14.2 percent. They are seeing a slowdown of growth in the gaming sector; but the demand for their data centres is continuing to grow rapidly. According to IOT analytics, a conservative estimate for total addressable public cloud market is expected to plateau at $600 bl. The current addressable market is $157bl.
Nvidia faces multiple challenges though. They operate in a highly competitive environment with significant regulatory hurdles. Last year, Nvidia attempted and failed to acquire ARM from Softbank, which resulted in a $1.36bl expense. The supply chain crisis has also prevented Nvidia from operating at its historic capacity.
Below is a table comparing certain key metrics for Nvidia:
| Rolling 12-months ended | EPS | PE day after release of results | ROE | Net Margin |
|---|---|---|---|---|
| 01-May-22 | 3.73 | 43 | 36.17% | 32% |
| 02-May-21 | 2.12 | 74 | 28.37% | 28% |
Disclosure: Nvidia is held in the Lunar BCI Worldwide Flexible Fund.
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