Felix Prehn, the educator behind Goat Academy, breaks down Nvidia’s latest numbers in a simple, practical way. He focuses on what matters: profits, growth, and risk. The main idea is clear. Nvidia is not slowing down. Its profits and margins show a wide moat, and recent price drops look like normal pullbacks, not a trend change.
First, the profits. Nvidia recently reported revenue around $46 billion and is keeping about 57% of every dollar as net profit. “Net profit” means what is left after all costs. Very few hardware-linked companies keep that much. Even more impressive, gross margins are set to rise toward roughly 74%. “Gross margin” is the share of sales left after direct costs to make the product. When gross margin is above 60%, it often signals a strong “moat,” which means competitors struggle to match the product or price. Margins in the 70s suggest extremely strong product power and pricing.
Second, the growth. Revenue is up about 56% year over year. Earnings per share also beat guidance. Nvidia guided next quarter revenue to about $54 billion, plus or minus 2%. That guidance excludes China revenue. If any China sales return, that would be upside. This is not a sign of fading demand. It looks like disciplined guidance with room to beat again.
Third, the valuation in context. A forward price-to-earnings ratio (often written as “forward P/E”) near 40 means investors pay 40 times next year’s expected profits per share. “Forward” means it uses next year’s forecast, not last year’s results. In fast-growing tech, a 40 forward P/E is not outlandish when margins and demand are this strong. The key is to match price with growth, moat, and execution. Nvidia appears to score high on all three.
What about the stock chart? Prehn points out that pullbacks are normal. A “pullback” is a short-term price drop during a longer uptrend. He notes the shares remain above the 50-day moving average. The “50-day moving average” is the average closing price of the last 50 trading days. Staying above it often signals the uptrend is intact. Media headlines may sound dramatic, but the chart action looks like standard digestion after a big run.
How does he think about risk? Prehn teaches three simple ideas used widely on Wall Street:
- Buy the rebound: Enter after a healthy pullback shows signs of turning up. This reduces the chance of chasing highs.
- Buy the breakout: Enter when price moves above a clear resistance level on strong volume. This confirms demand.
- Use clear exits: Place stop-loss levels based on your rules. Stops help cap losses if the thesis breaks. For example, traders might use a stop under a recent swing low or below the 50-day moving average. Long-term investors might use wider stops or fundamental “stop” rules, such as exiting if margins or growth meaningfully deteriorate.
He also watches “dark pool” activity and options flows for sentiment. “Dark pools” are private markets where large institutions trade big blocks away from public exchanges. Spikes in call option buying can hint at bullish sentiment, though it is only one signal, not a guarantee.
Beyond Nvidia, Prehn highlights opportunity across semiconductors. When a leader runs, peers can follow as demand spills over the supply chain. He mentions names like AMD and other beaten-down chip stocks that may rally as investor sentiment shifts from “hate” to “less hate,” then to “accept,” then to “like.” That cycle can offer strong short-term gains even if the leader remains the best business.
Bottom line: Felix Prehn’s view is that Nvidia’s earnings quality, expanding margins, and strong guidance point to a durable AI cycle, not the end of it. Normal pullbacks are likely, not red flags. Clear rules for entries and exits help investors stay disciplined. With a wide moat and rising profits, Nvidia sets the tone for the sector—while select laggards may offer catch-up potential.
For more background on the educator and the program, see Goat Academy’s about page: Felix Prehn Goat Academy.