Nvidia's balance sheets are coming on Wednesday. Previously, the most important balance sheet for technology companies would be Apple. Not anymore, it's Nvidia now. Because the main reason behind the rise in the last year and a half, especially since the beginning of this year, is artificial intelligence. The value of all companies that touch artificial intelligence is rising. When it comes to artificial intelligence, first of all, there are microchip companies such as Nvidia, AMD and Arm. Then there are companies that produce for these microchip companies or help them produce them. Then, there are companies such as Palantir and Microsoft, which use artificial intelligence and turn it into software, trying to increase the efficiency of consumers with this software.

The value of all these is rising rapidly. But if Nvidia brings a bad balance sheet after the closing on Wednesday or has a slight cough in future expectations, very difficult days await us. That's why I wanted to share Nvidia balance sheet predictions with everyone today. Do you know what is more important than balance sheet expectations? There are such developments in technology and recent developments in artificial intelligence technology that I think the growth of artificial intelligence cannot be stopped, no matter what kind of balance sheet Nvidia brings in the short term and no matter what direction the price movement is in the short term.

That's why today we'll walk through the latest major advances in AI technology, their impact on microchip demand, and then the Nvidia balance sheet. The topic that excites us so far about artificial general intelligence is large language models. In other words, if we feed artificial intelligence with lots of text, words and sentences, and information, it can establish new connections between these and thanks to these connections, it can write great poems, write books, solve our problems, and complete our sentences. This is our point so far. Well, if we add not only words but also images, sounds and videos to that pool, then we can reach the general world model.

The general world model requires a model for artificial intelligence to understand how the world works, to establish connections between what is happening around it and to improve itself from there, and the big language model does not work here. The general world model works. For this, new combinations of images, sounds, information, words and sentences must be introduced, and artificial intelligence must better understand the course of the world by making simulations about the real world with what it learns from these. We basically call this artificial general intelligence. Because artificial general intelligence means intelligence that does everything the human mind can do, and the basis of this is developing an understanding of how the world works.

So, what new developments are there in the world of artificial intelligence recently? I believe that we are starting to move towards general world models. Open AI's Sora, of course. I've touched on Sora before. Sora is an amazing application that converts text to video, and when we first looked at it, it was the first thing that came to our mind. I said that video producers, editors, and filmmakers have a difficult job. But actually the issue seems a little bigger. Because Sora offers us general world modeling as a tool that will be the basis of artificial general intelligence. Let's get into some details.

After Open AI's Sora was released, Elon Musk said, perhaps with a slightly jealous perspective, that we have already had the General World Model for a long time. In other words, world-wide modeling Tesla cars send the images they collect from the roads to the center. We create new simulations on those images. We simulate world simulations and all kinds of road conditions that Tesla cars may encounter and teach them to the vehicle. This is what world general modeling means. You combine and bring together what you see and hear around you. With this, you define the world as a model and then develop how you will react to developments in the world through new simulations, that is, trial and error learning cycles. The definition of artificial general intelligence.

The videos created by Open AI Sora started to be talked about a lot after they hit the world like a bomb. What is the technology behind it? What is Open AI trying to do here and look, there is a very interesting person. His name is Bill Peebles. Bill Peebles works at Open AI and works on Sora and AGI, Sora and artificial general intelligence technology. The fact that Open AI combines these two topics gives us a clue about where we are going. The biggest concern of scientists about artificial general intelligence was that there were too many obstacles before it could happen. Maybe our architectures were not suitable. Maybe the data was not suitable. Maybe the models considered were not correct. There was a lot of anxiety.

But Bill Peebles brings an interesting perspective to this issue and says that we are creating these one-minute videos. That's nice, but this also seems like a suitable technology for artificial general intelligence simulation, that is, simulations that will work on the general world model I just mentioned. From here we understand that Open AI targets artificial general intelligence with this technology, and there is a very interesting detail on this subject in an article published by Open AI. It tries to do this with different processor powers.

There is a Base compute, 4 times the base compute, and 16 times the base compute. What does Compute mean? It means processing power and you see that the quality in base compute is quite bad. AI gets better at 4x. At 16 x it gets much better. This is basically an AI simulation. In other words, data about dogs, snow, and a person walking a dog were uploaded here, then a dog simulation tried to develop from all of these, and as the processor power increased, the dog became perfect. So what does this tell us?

I think the only problem with artificial intelligence seems to be processing power. The model problems, architecture problems, and data problems we mentioned before may not be real. It seems like we can achieve artificial general intelligence only if there are powerful processors. Because it has an amazing real world simulation. By making these simulations, artificial intelligence will understand how the real world works. Then he will be able to perform all the mental activities that humans can do. When we look at all this information, we better understand why Sam Altman sought an investment of $7 trillion.

Sam Altman says we need microchips. If I have much more powerful and many more microchips, we will reach artificial general intelligence, and whoever achieves artificial general intelligence will definitely rule the world. Now, in this context, we need to come to Nvidia's balance sheet. Sam Altman cannot say he will produce all the chips himself. I will create such an ecosystem that we will be the first to reach artificial general intelligence, and since we are the first to reach artificial general intelligence, we will become the leader of the world and perhaps all universes because we are the first to reach artificial general intelligence.

The size of the claim is at this level, and when we look at it in this context, it is not very important that Nvidia and / or any artificial intelligence-related company has a bad balance sheet. But I know there are some short- and medium-term ministers among you, and when you look at your portfolio, you cannot stand it melting down. So now let's take a look at my expectations about Nvidia's balance sheet. But frankly, it doesn't matter for a long-term investor like me.

When we look at all these developments in technology, I believe that we are at the very beginning of the journey regarding artificial intelligence, and I think that Nvidia is one of the most important players at the center of this journey, and although it may slow down or speed up from time to time, it still has a strange path to take. That's why I continue to hold my long-term positions. Of course, I may be wrong about the future, maybe Nvidia will have a rival. All this is possible, but this is my opinion. Now, let's take a look at the details of the balance sheet.

After the balance sheet in May 2023, Nvidia jumped on the technical chart. There he talked about artificial general intelligence for the first time. He said how open the future was for growth and made a base of around 400 dollars. This was a channel where it peaked at the upper end, approaching $500. Later, this channel was broken starting from the beginning of this year. In fact, there was no new special news about Nvidia. But the development in artificial intelligence has excited people and we are rising breathlessly. My guess is that if Nvidia brings a bad balance sheet or a coughing future expectation here, it may drop to the level of 610 - 600 dollars.

But for it to go down even further, really extraordinarily bad things have to happen, I don't expect that. Well, I don't think Nvidia will bring a bad balance sheet. Nvidia is generally a company that keeps its promises. A company that exceeds expectations. That's why I expect such a balance sheet this time too. But the company's expectations for the future are, of course, another matter. When we look at the technical side, Nvidia RSI is currently quite high at 77. Although it has pushed 80 - 85 before. This is risky, the RSI above 70 indicates there is a possibility of some retracement. When we look at the MACD again, there is a slight downward curl and you can see that the columns at the bottom have weakened. These are not good signs either.

So technology tells us to be careful. Yes, it is above all averages now, it is comfortable in that respect. But the last two red candles and these technical breaks seem a little scary for the short term. This is somewhat natural, in fact, Nvidia has gone so fast that many investors want to sell their shares before the balance sheet, cash in and look to the future. That is not the path I will follow because I am looking at it in the long term. But in the short term, I also agree with those who behave like this. We are faced with a stock that has gone very fast and inflated very quickly.

Well earnings expectations had EPS GAAP yield of $3.71 in the previous quarter. This was 69 cents above expectations. Again, on the turnover side, it made a turnover of 18.12 billion dollars. This was $2 billion above expectations. Despite this, only the stock fell during that period. Don't forget this. Because there are traders who have excessive expectations about Nvidia's balance sheet. So even when you bring such great numbers, it can fall. This quarter, GAAP income is expected to be $4.21 per share and revenue is expected to be $20.52 billion. Nvidia needs to get above both of these once and for all.

In other words, if it returns 4.21 earnings per share, the market will not be satisfied. It needs to be slightly above this and again, on the turnover side, 20.5 is mentioned here. No, we will only be comfortable if it reaches 21.5-22 like this, and despite this, Nvidia may still fall for the reasons I have mentioned above. Well, analysts' expectations for the future are that they expect earnings per share of $12.39 this year. This means a growth of 270% compared to last year. They expect 72% growth in 2025. They think it will decrease to 23% in 2026. So, when we look at the average of these three, there is a growth expectation of almost 100% over 3 years.

Even the slightest cough will tire us out. Price earnings ratios will decrease if Nvidia achieves these. By the way, when we look at the price earnings ratio, Nvidia has a figure of 58.6. This is not so scary, there are much scarier stocks when we look at the price earnings ratio. In terms of turnover, a turnover of nearly 60 billion dollars is expected in 2024. That's 119% year over year. So Nvidia needs to tell us something a little better here. It's like 63 billion - 64 billion dollars, so the expectations are very, very high. The company's performance in meeting expectations has always been positive. If you look at Earning Surprise, it always manages to exceed expectations. It has been a very positive company in this respect since 2012.

Wall Street analysts' revisions are always upward. Expectations are constantly increasing, both for 2029, 2028 and 2027. Today, there is almost no one with a large fund on Wall Street who does not recommend buying Nvidia. As a matter of fact, when we go to the type ranks, 37 out of over 40 analysts are giving buy. There are 3 buys and zero sells. They have a target price of $746, which will be achieved within a year. Here it means an upward move of 2.86%. When we look at the top analysts, that is, the best analysts, they also have an expectation of $ 750. The highest expectation is 1200 dollars, the lowest expectation is 560 dollars, and the average expectation continues around 750 dollars.

Now, when we look at all this, if you are an investor who is a little too focused on the short-medium term, I think it may be beneficial not to go long Nvidia. Because the upward direction does not seem to be very upward. So we are already at 740, it looks like it will go to 750 at most. On the downside, there seems to be a bit more danger and a cough on the balance sheet could disrupt things. Remember before, although the stock had brought very good balance sheets in the last two quarters, it was beaten by nearly 10%. But these don't concern me.

I'm going full long, I won't even hedge, it doesn't matter. Because I believe Nvidia's next years are very, very bright. I don't want to trade in these types of stocks, I don't want to get into the bottom. I can take a look at the losses for a while. Of course, I will have a stop loss and I do not want to stay below a certain level. But I am so profitable in this stock that, frankly, my patience is high. Make your own decision within this framework. On the one hand, what will the balance sheet, Wall Street, speculators and manipulators do in the short and medium term? On the other hand, are we heading towards artificial general intelligence in the long term? Can Sam Altman find this $7 trillion investment? The only thing that concerns me is how much Nvidia would lose if it found 5 instead of 7.

The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.