NVIDIA once again broke revenue and profit records. Even that wasn’t enough
NVIDIA reported its latest quarterly results, and if they were important before, they were even more important this time because it is seen as the canary in the tech industry’s coal mine: Is there still room for vertical growth at the AI giant?
The answer is yes, although with nuances.
Why is this important?NVIDIA is the thermometer, barometer, and compass of AI development. That’s largely driven the stock’s rally this year. Its performance is a key indicator of demand for AI technology.
Numbers:
- Quarterly revenue was $30.04 billion, 122% above market expectations.
- Earnings per share were $0.68 (expected: $0.65).
- The $32.5 billion forecast for the next quarter is above expectations.
- Net profit $16.599 million (up 168%).
- Gross profit 75.1% (versus expected 75.5%).
Read the gross profit figures again if you didn’t understand them.
NVIDIA continues to benefit from high expectations for AI from large tech companies, which are its top customers by volume.
Yes, but. Despite beating expectations, the company’s shares fell nearly 7% after the market closed. Even stellar results can disappoint investors. That’s the market, my friend.
The drop reflects the market’s expectations for even more, particularly in revenue guidance, with some analysts pointing to a range of $33,000 million to $34,000 million for next quarter.
What’s next?.
- NVIDIA announced a $50 billion share buyback program.
- The company confirmed the launch of its Blackwell chip in the fourth fiscal quarter. It was a bumpy launch.
- Investors remain keenly aware of the launch and its subsequent adoption… as well as possible signs of a slowdown in AI spending by big tech companies.
CEO Jensen Huang said demand for AI continues to grow, but a small drop in gross profit and a slightly lower-than-expected outlook have left investors somewhat wary.
In perspective. Since the end of 2022, NVIDIA has increased its valuation ninefold and has already surpassed $3 trillion. There are only two companies in the world that are above that barrier: Microsoft and Apple. And NVIDIA has done it with far fewer employees. However, belonging to this select club leaves no room for disappointment, even minimal.
NVIDIA continues to be and will remain the leader of the AI revolution for some time to come, but the extreme demands of the market are keeping an eye on every detail to keep its stock growing.
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Featured Image | NVIDIA, Vecteezy, Xataka