[5/28] Short-term volatility or long-term growth? NVIDIA's earnings forecast and SpaceX's challenge

At the forefront of the technology market, the quarterly earnings announcement of semiconductor giant NVIDIA and the failed test flight of space exploration company SpaceX are simultaneously attracting attention. The former symbolizes high revenue expectations against the backdrop of an AI shift, while the latter represents the technical challenges indicated by consecutive launch troubles. We will organize the background and comments from stakeholders for each, and explore the implications for future market trends.

1. NVIDIA's earnings outlook

1-1. Impact on revenue forecasts and margins

For NVIDIA, significant revenue growth and a high profit margin recovery will be key in the next earnings report. While the market considers 'the continuity of AI infrastructure demand to be of the utmost importance' (analysts), there are also voices saying that 'the numbers are difficult to read this quarter due to the impact of regulations on China.' Additionally, CEO Jensen Huang has attempted to build investor confidence by indicating that 'we can absorb temporary margin deterioration this quarter or next, and return to the 70% range by the end of the fiscal year.'

1-2. Impact of China export restrictions and factors of 'noise'

Following the tightening of US authorities' export restrictions on high-performance AI chips to China, NVIDIA recorded an impairment loss of approximately $5.5 billion in its most recent earnings. As a result, a 'temporary downside' in revenue is expected for this quarter. One market participant pointed out that 'excluding the actual loss from the impairment, the underlying earning power remains high,' and analyzed that 'the confusion surrounding the regulations is the main cause of the noise.'

1-3. Analyst views and long-term outlook

Although stock prices may remain within a certain range in the short term due to the aforementioned 'noise,' many analysts assert that 'the growth curve of AI infrastructure is still in its early stages.' The introduction of new products (next-generation GPUs) expected from the fourth quarter onwards and expectations for the high-speed connection technology 'NVLink Fusion' are evaluated as long-term growth drivers.

2. SpaceX's consecutive failures and challenges

2-1. Overview of the recent third consecutive test flight failure

In mid-May, during the 9th flight of the Starship test vehicle, SpaceX lost control of the craft starting from a fuel tank leak, leading to an explosion upon atmospheric reentry. Furthermore, the opening/closing door for releasing dummy satellites did not operate, and the primary mission objectives were not achieved. According to those involved, 'while the acquisition of flight data is considered a success, multiple operational issues were highlighted.'

2-2. Lessons from failure and future roadmap

Founder Elon Musk emphasized that 'testing is a process of gathering data and applying it to improvements.' Permission for additional test flights has been granted by the FAA (Federal Aviation Administration), and the policy is to shorten the launch interval to reflect the lessons learned. Musk stated that 'continuous testing is the only path to ultimate success,' showing his enthusiasm for the next mission.

3. The technology market from a macro perspective

3-1. Ripple effects on AI-related stocks

NVIDIA's performance trends influence the sentiment of the entire data center-related stock sector, including AMD, Intel, Google Cloud, and Microsoft Azure. The point is how to interpret short-term performance 'noise,' and there is a strong view that 'even after going through a temporary adjustment phase, the stock price will return to an upward trend in the medium to long term due to expanding AI demand.'

3-2. Investment trends in the space development sector

Meanwhile, SpaceX's successive test failures also affect investment decisions in private space development. Venture capital and government-backed funds are in a phase of re-evaluating 'capital supply to high-risk, high-return areas,' but many projects challenging low-orbit communications and lunar landings continue to attract funding. If they show the next success, market enthusiasm will likely rise again.

NVIDIA's earnings 'noise' and SpaceX's test flight failures are both often perceived as short-term volatility factors. However, the essence of the long-term themes of AI infrastructure and space development remains unchanged, and it is important for investors not to be swayed by immediate fluctuations, but to discern the technological evolution and the continuity of market demand in both fields. We will continue to carefully analyze the results of earnings announcements and test flights to decipher the implications for the market.

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