In a note to clients following NVIDIA's (NVDA) earnings release, Goldman Sachs provided its thoughts on why Nvidia (NASDAQ:NVDA) has risen so much beyond the obvious earnings and guidance beat.
Analysts at the firm said the setup into the print seemingly played a big role as it felt like the overwhelming consensus heading into the print was that we were going to get another beat and fade.
That was similar to the last two quarters). "As such, [with the benefit of hindsight], the 'beat & fade' reaction may have been pulled forward," said Goldman Sachs.
"One can argue that a more ‘steady’ beat/raise cadence is healthier for the stock (and the ongoing ‘peak’ debate) – if you can call beating by ~$2bn in revenues 'steady,' of course," they added.
The bank believes the NVDA multiple has received a boost from more ‘predictable, sequential’ revenue beats rather than roller-coaster revenue beats that feel unsustainable.