Nvidia crushes earnings; stock falls after hours

Okay, if you’re a trader I sort of understand selling Nvidia (NVDA) after today’s earnings report: Sell on the news; How can it get better? How long can the company keep it up? After all, the stock closed today just pennies below it’s all time high. (It’s the possibility of this sell on the news reaction that led me to sell my call options in Nvidia on Monday.) In after-hours, Nvidia fell 3.7%.
 
But if you’re an investor with a slightly longer time frame than the week (or the May 18 expiration of your call options), then today’s numbers should put a smile on your face. And I’m certainly glad that I hold Nvidia shares in my Jubak Picks portfolio.
 
After the close of New York markets today, the company reported first quarter earnings of $2.05 a share, 39 cents a share above Wall Street estimates. Revenue climbed 65.6% year over year to $3.21 billion against the $2.88 billion consensus forecast. Non-GAAP gross margins rose to 64.7% from 59.6% in the quarter a year ago.
 
And, crucially for a high-flying growth stock, Nvidia raised guidance for the second quarter. Revenue, the company said, will be in the range of $3.04 billion to $3.16 billion, above the current consensus analyst projection of $2.95 billion. Non-GAP gross margins will be 63.5%, give or take 50 basis points.
 
Nvidia shares are up 32.53% since I added them to my Jubak Picks Portfolio on December 29, 2017. Today, May 10, I’m raising my target price on Nvidia to $280 a share from the prior $230.
 
Full disclosure: I own shares of Nvidia in my personal portfolios.