Latest news with #non-China
Mint
3 days ago
- Business
- Mint
Nvidia's most impressive feat yet? How the chip maker overcame a China ban.
The artificial intelligence boom is roaring once again—and Nvidia is reaping the benefits. On Thursday, a post-earnings rally briefly made Nvidia the most valuable company in the world. By the close it was No. 2, just barely behind Microsoft, with a market value of $3.4 trillion. This came a day after the company reported solid fiscal first-quarter results and gave a better-than-feared revenue outlook for the current quarter. But the numbers don't do the quarter justice. Nvidia handled the loss of a massive business line and still generated impressive growth. Revenue for the April quarter was up 69% year-over-year to $44.1 billion, ahead of expectations. Nvidia's data-center business, primarily driven by AI chip demand, grew even faster, up 73% from last year to $39.1 billion. To be sure, Nvidia's guidance was more mixed. For the current quarter ending in July, Nvidia provided a revenue forecast range with a midpoint of $45 billion, which was below analysts' consensus of $45.9 billion. It's the first time since Nvidia started its AI supercycle two years ago that the chip maker disappointed with its outlook. But in recent weeks, some on Wall Street had come to expect much worse. The cause of the miss is largely outside of Nvidia's control. It stems from President Donald Trump's decision in mid-April to effectively ban sales of the company's H20 chips to China. Nvidia wisely quantified the revenue impact at $10.5 billion in total across the April and July quarters. That helped investors quickly realize that Nvidia would have significantly raised guidance versus consensus if not for the H20 effect. It suggests there's better than expected strength in the non-China business. Sure enough, after an initial earnings bump, Nvidia's gains accelerated in after-hours trading. On Thursday, the stock finished up 3.3%, making it one of the S&P 500's best performing stocks on the day. The good news for Nvidia investors is the market is forward-looking. The China headwinds have been largely de-risked, with an outlook that's reset for potential upside going forward. Even with all the growth to date, Nvidia CEO Jensen Huang said demand for the company's AI infrastructure products is still improving. 'AI is this incredible technology that's going to transform every industry," he said on the earnings call with investors. 'We're really at the very beginning of it, because the adoption of this technology is in its early, early stages." Demand from the largest technology companies continues to rise. Heading into the latest earnings season, some on Wall Street were concerned that the industry would lower its full-year capex budgets to spend hundreds of billions on AI infrastructure amid macro uncertainty. Instead, the opposite has happened. Meta Platforms revealed it planned to spend more on AI and Microsoft said it was more supply-constrained for AI capacity than they anticipated. Of course, robust demand doesn't mean much if you can't serve it. Nvidia's management put to rest several supply side concerns this week too. Chief Financial Officer Colette Kress said the company's Blackwell GPU production is ramping up, with major cloud computing companies now deploying nearly 1,000 top-of-the-line GB200 NVL72 server racks on a weekly basis. Each rack costs several million dollars. Kress said Microsoft alone is expected to purchase hundreds of thousands of GB200s to serve its customers. More important, Nvidia's next AI server, the Blackwell Ultra, is on track. The company sent test shipments of the Blackwell Ultra GB300 NVL72 AI server to some customers in May, Kress said, and expects to start production shipments later this quarter. As a result, Wall Street is getting more optimistic about the prospects for Nvidia's second half. The report showed an 'acceleration of the business other than the China headwinds," Morgan Stanley analyst Joe Moore wrote. 'Everything should get better from here." Huang pointed to several growth drivers behind the rising demand for AI; so-called reasoning, agents, and sovereign AI. The latest AI models have a reasoning feature that allows them to reflect more thoroughly on a query by performing numerous thought computations to arrive at a higher-quality response. Huang says reasoning consumes more than 100 times more compute resources compared with prior AI models. 'Reasoning models are driving a step-function surge in inference demand," he said. Inference is the process of generating answers from AI models. Then there are the AI agents, which according to Huang, are starting to become a reality. Agents can take simple directions and complete multistep computer actions often used to automate tedious business and personal tasks. 'Agentic AI is game changing," he said, adding the technology is finally working and being successfully implemented by enterprises. Lastly, there's sovereign AI. Nvidia recently announced large deals with Saudi Arabia and the United Arab Emirates. The first phase of Saudi Arabia's AI factory buildout features an order for 18,000 Nvidia AI servers with potential for 'several hundred thousand" GPUs over the next five years. The U.A.E. agreement expects its first AI cluster to go live next year. Huang said on the conference call that there are 'a whole bunch" of other deals that haven't been announced, noting that he would be traveling to Europe next week to announce some of them. Nvidia stock is now up nearly 40% from the trade war lows in April. It's up 4% on the year. Even after the latest rally, the stock isn't expensive, trading at 29 times forward earnings estimates, while analysts expect 45% sales growth over the next 12 months. Compare those numbers to Apple, which trades at 28 times with 4% sales growth. Nvidia is far more attractive on a valuation-to-growth basis. With every earnings report, Nvidia looks more like a once-in-a-generation growth story akin to the early years of the PC revolution and the iPhone; those are trends that both lasted more than a decade. For Nvidia, we're only two years in. Write to Tae Kim at
Mint
3 days ago
- Business
- Mint
Can this under-the-radar company cash in on the $150 bn weight-loss drug boom?
Weight-loss drugs such as Ozempic and Wegovy have shaken up global pharma. With proven outcomes and rising demand, the segment could hit $150 billion by 2035. It's no surprise that companies across the healthcare chain are rushing to get a piece of the action. Onesource Specialty Pharma Ltd, which demerged from Strides Pharma Science Ltd and listed on 24 January 2025, wants it, too. The company is building capacity, developing complex products, and onboarding global customers. Revenue from weight-loss drug supplies is expected to start in 2025-26, with scale-up by 2026-27. So, is this newly listed contract development and manufacturing organization (CDMO) just getting started, or is the rally already pricing it in? Let's break it down. India's first pure-play specialty pharma CDMO Onesource is India's first pure-play specialty pharmaceutical CDMO. It focuses on the development and manufacturing of complex, high-value pharma products and biologics. Also Read: Amrit Bharat boost: Stocks to benefit from station modernisation Its integrated capabilities include biologics, drug-device combinations, complex injectables, and oral technologies like soft gelatin capsules. Currently, it has the capacity to produce over 100 million sterile doses and 2,400 million capsules annually. However, this is expected to grow. The company plans to double its sterile capacity to over 200 million in the next three to four years. Around 90–95% of its sales are consumed in the US and the European Union, with the remaining coming from other global markets. The company benefits from strong customer stickiness, with 75% of its business coming from repeat orders. However, this concentration in regulated developed markets also brings risks—any shifts in regulatory policies, trade tariffs, or pricing controls in the US or the EU could materially impact growth. Riding the miracle weight-loss drug wave Onesource is well-positioned to benefit from three major industry tailwinds. The most prominent is the rapid rise of GLP-1 drugs, known for effectiveness in treating Type 2 diabetes and obesity. The second is the pending Biosecure Act—a proposed US legislation that aims to reduce dependence on Chinese pharma supply chains. If approved, non-China partners like Onesource could benefit from increased demand to manufacture drugs. The third driver is the recent acquisition of a large CDMO player (name undisclosed) by a pharma major, which has further tightened supply for outsourced could allow companies like Onesource to take on more business. Within GLP-1, the loss of exclusivity—patent expiry—presents a long-term opportunity for players like Onesource with drug-device combination (DDC) capacities, which integrate both drugs and medical devices into a single unit. Onesource has strong DDC capabilities, which could help meet the rising demand for fill-finish and assembly services from generic entrants. It has witnessed a notable increase in the request for proposals (RFPs), with over 39 RFPs at various stages of discussion. Building capabilities for next-gen GLP-1 drugs Within business segments, Onesource is a pioneer in DDC (including GLP-1s) solutions with a full-service model. This segment has nine molecules in its portfolio, including GLP-1s, biologics, and small molecules. It has 17 customers, including four out of the top five global generics. Also Read: Four stocks to watch as India's space economy eyes $44 billion by 2033 The DDC, including the GLP-1 drug market, is projected to grow at over 20% CAGR—$5 billion in FY23 to $12 billion in FY28. With marquee global generics as clients and a growing molecule pipeline, Onesource is well-positioned to benefit. Onesource uses automatic machines by Bausch + Ströbel filling lineto fill, close, and package pharma products like vials, syringes, and bottles. This is crucial for ensuring the safety and quality of GLP-1 drugs. In addition, it has over 20 advanced machines that can be customised to handle different types of injectable drugs, like GLP-1. This setup helps the company manufacture drugs as per global quality standards. Doubling DDC capacity to meet rising demand Customer trust is strong across service offerings, particularly in DDCs, where Onesource has executed nearly 50 projects, including GLP-1s and others. It has 10+ DDC projects, which will convert into supply agreements, with approvals expected in H2FY26. In addition, it has 15+ DDC projects, which are expected to be commercialised in a staggered manner during FY26-28. One of these—a DDC product approved in the US and Europe—is expected to go commercial in FY26. To capitalise on the opportunity, Onesource is doubling its DDC capacity from 40 million units to over 90 million by Q3FY26. Capacity is being scaled up in line with customer forecasts and expected patent expiry over the next 2-3 years. A second plant is planned by end-FY26, which will again double capacity. These products have higher per-unit realisations, though volumes may not match GLPs. However, even with moderate volumes, these high-value projects are expected to contribute meaningfully to near-term revenue growth. While DDC volumes remain modest, GLP-1 drugs are expected to scale rapidly. Morgan Stanley estimates that obesity drug penetration could rise to 10% by 2035, from just 1% currently, translating to a $70 billion opportunity. Three GLP-1 molecules lined up for commercial supply Here's where it gets interesting. Onesource has lined up three GLP-1 molecules—Molecule A, Molecule B, and Molecule C—each with signed Master Service and Clinical Supply Agreements. Also Read: This luggage leader is staging a turnaround. But can it overcome its baggage? For Molecule A, key customers include three of the top five global generic players. Commercial supplies began in Q4FY25, and full revenues will start flowing from FY26. Meanwhile, Molecule B—with two of the top three generics as key clients—will begin production in FY26. Revenue contribution will start after the launch in various markets. In contrast, Molecule C will come into play only after exclusivity ends in 2036. Even so, Onesource has already secured supply agreements for it with the top three generics—a strong signal of future demand. Global launch potential from patent expiry is a key trigger The big trigger is the expiry of the Semaglutide patent—a key GLP-1 molecule used in weight-loss drugs such as Ozempic and Wegovy—in over 100 countries, including Canada, Brazil, Saudi Arabia, and India. Patent expiries are expected in Q4FY25 and Q4FY26, enabling commercial supplies in these markets. FY27 is likely to be the first full year of sales for Semaglutide in many of these regions. Many clients have already paid reservation fees and entered into take-or-pay agreements—a sign of confidence in execution and like Brazil and Canada are underpenetrated, with less than 1% penetration in Brazil and 4-5% in Canada. According to management, generics entering these markets could drive market expansion by 10–12 times in Brazil and 4–5 times in Canada. With Molecule A expected to contribute fully from FY26, this ongoing fiscal could be a pivotal year for Onesource. Capex-led capacity ramp-up on track With supply agreements already secured with the top generic players, the company is investing about ₹850 crore in expanding capacity for DDC-related development and commercialisation. This will be funded via internal accruals, partner contributions, and debt. Clients are also paying advances to reserve capacity, which also reduces execution risk. Most of this expansion is expected to be completed within 12–18 months, aligned with the timeline of supply agreements. Current projects are based in India, though the company is evaluating overseas expansion, both organically and inorganically. Profitability and margin boost in FY25 The numbers speak for themselves. Revenue rose 33% from last year to ₹1,445 crore in FY25, driven by 16 new DDC projects, expansion into softgel CDMO services, and new product launches. Ebitda more than doubled, up 104% to ₹466 crore, with a product mix shift towards high-value biologics and DDCs. Margins expanded by 11.6 percentage points to 32%, aided by better capacity utilisation and operational synergies. It also posted a net profit of ₹93 crore, its first profitable year. With 15 new customer additions and strong repeat business, the company expects growth from FY26 onwards to be significant. With new capacity expected to go live in FY26, asset turnover is expected to increase from 1.9 (FY25) to 2.5 in the near term and 3.0 in steady state. With strong asset turnover, the company expects revenue to grow at a compounded annual growth rate (CAGR) of over 30%, from ₹1,445 crore in FY25 to ₹3,378 crore in FY28. As economies of scale kick in with higher production, Ebitda is expected to grow at a 40% CAGR—from ₹466 crore to ₹1,331 crore. With higher operational efficiency, the company estimates margin to expand from 32% to 40%, and return on capital employed from 23% to 50% in steady state. In addition to DDCs and GLP-1s, Onesource is also perfectly placed to tap other emerging drug markets. Biologics, a fast-growing class of medicines derived from living organisms, is expected to grow at 14% CAGR from $20 billion (in FY23) to $38 billion in FY28. Similarly, the soft gelatin market is also expected to grow at a 9% CAGR from $12 billion to $18 billion. With one of the largest installed capacities in the top five globally, Onesource is well placed to capture this growth. Valuation reflects growth potential The company trades at an EV/Ebitda multiple of 43, which is higher than peers—Neuland Labs (41), Piramal Pharma (19), and Blue Jet Healthcare (36). On FY27E EV/EBITDA of 15x, the stock appears more reasonably priced. However, much of the near-term valuation hinges on the execution of its expansion plans and actual earnings delivery. Having said that, the opportunity comes with risk. Most of the CDMO revenue in FY25 came from services provided during the pre-approval or filing phases before the product is commercialised. Therefore, risks such as products being dropped and the lack of approvals can derail the growth story. Other risks include higher competition and a long gestation period. About the author: Madhvendra has over seven years of experience in equity markets and has cleared the NISM-Series-XV: Research Analyst Certification Examination. He specialises in writing detailed research articles on listed Indian companies, sectoral trends, and macroeconomic developments. Disclosure: The writer does hold the stocks discussed in this article. The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Yahoo
3 days ago
- Business
- Yahoo
Wall Street is looking past Nvidia's China problem… for now
Wall Street is brushing aside Nvidia's (NVDA) China worries, pointing to the company's strong sales growth in the rest of the world following its fiscal first quarter earnings on Wednesday. Nvidia stock jumped more than 5% in early trading Thursday. Nvidia reported better-than-anticipated revenue of $44.1 billion in Q1, up 69% year over year, but fell short on adjusted earnings per share, which topped out at $0.81. Wall Street was anticipating adj. EPS of $0.93. Data Center revenue was also light, coming in at $39.1 billion versus expectations of $39.2 billion. Normally, that kind of report would send Wall Street into a panic, but investors shrugged off the misses, which Nvidia attributed to the $4.5 billion charge it took on H20 chips the Trump administration banned it from selling to China in April. That's because, putting the H20 charge aside, Nvidia would have pushed well past earnings expectations. And while the company said it would take an $8 billion hit in lost sales due to the H20 ban in Q2, analysts are upbeat about Nvidia's outlook. 'Nvidia's business, excluding China, is booming,' Deepwater Asset Management managing partner Gene Munster wrote in a note following Nvidia's earnings announcement. 'For the July quarter, they effectively raised guidance for everything except China by 10%. Today's July guidance was for $45 billion. Adding back the $8 billion impact of the curbs gets us to $53 billion,' Munster wrote. 'The bottom line: These revisions are evidence that we are still early in the AI buildout.' Nvidia notified investors on April 15 that the US government ordered it to stop selling its H20 chips into China. The company built its H20 processor specifically for the Chinese market to comply with controls banning the sale of a more powerful chip to the region. During Nvidia's earnings call on Wednesday, CEO Jensen Huang said the company would no longer be able to continue modifying its prior-generation Hopper chips, which it used to build the H20, to produce less powerful offerings for China. But William Blair analyst Sebastien Naji wrote in an investor note that even if Nvidia is locked out of China, it will continue to benefit from further growth elsewhere. 'While tight US export controls essentially withdraw Nvidia from a $50 billion China [total addressable market] for AI, we see ample room for Nvidia to maintain its industry-leading growth over a multiyear period addressing the much broader non-China AI opportunity across hyperscalers, enterprises, and increasingly sovereigns,' he wrote. Sovereigns, or sovereign AI platforms, are AI services built and sometimes run by individual governments. And Nvidia appears ready to reap the benefits of sovereign AI buildouts, with Huang joining President Trump during his recent trip to the Middle East where Trump announced a deal that will see Nvidia provide hundreds of thousands of AI chips to Saudi Arabia and the United Arab Emirates (UAE) to power their own AI data centers. Despite Wall Street's general approval of Nvidia's results and outlook without China, Huang isn't giving up on the region. The CEO issued a dire warning during the company's earnings call, saying that whatever chip AI platform wins in China is positioned to lead globally. 'China is one of the world's largest AI markets and a springboard to AI success,' Huang said, adding that China's AI will move on with or without US-made chips like Nvidia's. According to Reuters, Nvidia is working on a new AI chip based on the company's Blackwell architecture that will meet the Trump administration's export controls. But it will need to ensure it can get that product on the market soon if it hopes to regain its lost market share in the country. Email Daniel Howley at dhowley@ Follow him on X/Twitter at @DanielHowley. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Wall Street is looking past Nvidia's China problem … for now
Wall Street is brushing aside Nvidia's (NVDA) China worries, pointing to the company's strong sales growth in the rest of the world following its fiscal first quarter earnings on Wednesday. Nvidia stock jumped more than 5% in early trading Thursday. Nvidia reported better-than-anticipated revenue of $44.1 billion in Q1, up 69% year over year, but fell short on adjusted earnings per share, which topped out at $0.81. Wall Street was anticipating adj. EPS of $0.93. Data Center revenue was also light, coming in at $39.1 billion versus expectations of $39.2 billion. Normally, that kind of report would send Wall Street into a panic, but investors shrugged off the misses, which Nvidia attributed to the $4.5 billion charge it took on H20 chips the Trump administration banned it from selling to China in April. That's because, putting the H20 charge aside, Nvidia would have pushed well past earnings expectations. And while the company said it would take an $8 billion hit in lost sales due to the H20 ban in Q2, analysts are upbeat about Nvidia's outlook. 'Nvidia's business, excluding China, is booming,' Deepwater Asset Management managing partner Gene Munster wrote in a note following Nvidia's earnings announcement. 'For the July quarter, they effectively raised guidance for everything except China by 10%. Today's July guidance was for $45 billion. Adding back the $8 billion impact of the curbs gets us to $53 billion,' Munster wrote. 'The bottom line: These revisions are evidence that we are still early in the AI buildout.' Nvidia notified investors on April 15 that the US government ordered it to stop selling its H20 chips into China. The company built its H20 processor specifically for the Chinese market to comply with controls banning the sale of a more powerful chip to the region. During Nvidia's earnings call on Wednesday, CEO Jensen Huang said the company would no longer be able to continue modifying its prior-generation Hopper chips, which it used to build the H20, to produce less powerful offerings for China. But William Blair analyst Sebastien Naji wrote in an investor note that even if Nvidia is locked out of China, it will continue to benefit from further growth elsewhere. 'While tight US export controls essentially withdraw Nvidia from a $50 billion China [total addressable market] for AI, we see ample room for Nvidia to maintain its industry-leading growth over a multiyear period addressing the much broader non-China AI opportunity across hyperscalers, enterprises, and increasingly sovereigns,' he wrote. Sovereigns, or sovereign AI platforms, are AI services built and sometimes run by individual governments. And Nvidia appears ready to reap the benefits of sovereign AI buildouts, with Huang joining President Trump during his recent trip to the Middle East where Trump announced a deal that will see Nvidia provide hundreds of thousands of AI chips to Saudi Arabia and the United Arab Emirates (UAE) to power their own AI data centers. Despite Wall Street's general approval of Nvidia's results and outlook without China, Huang isn't giving up on the region. The CEO issued a dire warning during the company's earnings call, saying that whatever chip AI platform wins in China is positioned to lead globally. 'China is one of the world's largest AI markets and a springboard to AI success,' Huang said, adding that China's AI will move on with or without US-made chips like Nvidia's. According to Reuters, Nvidia is working on a new AI chip based on the company's Blackwell architecture that will meet the Trump administration's export controls. But it will need to ensure it can get that product on the market soon if it hopes to regain its lost market share in the country. Email Daniel Howley at dhowley@ Follow him on X/Twitter at @DanielHowley.
Yahoo
3 days ago
- Business
- Yahoo
Magrathea launches new electrolyser to advance production technology and scale operations
Magrathea, a technology company specialising in magnesium production from seawater, has launched its new magnesium chloride electrolyser at its pilot facility in Oakland, California, US. This development marks a step towards scaling the company's operations and providing a US-based critical minerals supply chain. The company's new electrolyser is designed to optimise the production of magnesium metal by splitting magnesium salts using electricity. Magrathea's technology is set to significantly reduce both the carbon footprint and operating costs of future commercial plants. Over the coming months, Magrathea will collect and process data, aiming to minimise electricity usage, recycle energy and refine the dehydration process, which presents the largest cost-saving potential in magnesium metal production. The gathered data and processing insights are also expected to facilitate the permitting processes for new facilities due to the technology's environmental benefits. Magrathea's advancements in magnesium production technology come at a crucial time, as Russia and China currently dominate 90% of the global primary magnesium supply, with no significant producer in any NATO country. The company's pilot plant in California has the capacity to produce 4,000 pounds of magnesium annually at full capacity and demonstrates competitive operating costs. The technology is carbon-neutral, producing zero CO₂ equivalent/kg of magnesium, compared with more than 40kg of CO₂ equivalent with the current Chinese process. This attribute is expected to aid in streamlining future facility permitting. Magrathea CEO Alex Grant said: 'Magnesium is one of the most important critical materials, but NATO countries face a dire shortage of non-China supply. Western nations must view this supply crisis as a national security emergency. 'At our core, Magrathea's innovative technology revitalises a proven process with our own twist for considerable efficiency improvement and expense reduction. We expect to reduce the technology's operating expenses to make it cost-competitive with alternative production methods that exist today, including in China.' With plans to scale up production to two million pounds of magnesium per year by 2027, Magrathea aims to meet the demands of various industries including aerospace and defence. The company has already secured agreements with more than 25 companies including ten linked to the US defence industry, an offtake agreement with a global automaker and a resource supply agreement with Cargill. Additionally, Magrathea's production of chloride co-products opens further market opportunities. The company's scale-up efforts are supported by Sedgman Novopro, an engineering operator with mining and mineral processing expertise. Backed by credible investors such as the US Department of Defense and leaders from companies such as Glencore and Tesla, Magrathea is well-positioned to advance its magnesium production technology. "Magrathea launches new electrolyser to advance production technology and scale operations" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
