Chipmaker's quarterly results show a strong quarter but investors focus on what's next
Its shares have soared by almost 200% this year and its quarterly results reflect a strong quarter, but Nvidia investors wanted more of a wow factor in the chipmaker’s forecast.
The firm’s shares fell around 4% in premarket trading Thursday following its prediction of $37.5 billion revenue for the fourth quarter, above analysts’ average $37.1 billion but short of the upper estimate of $41 billion.
The third quarter’s results showed revenue of $35.1 billion, up 17% from the previous quarter and up 94% from a year ago. GAAP earnings per diluted share was $0.78, up 16% from the previous quarter and up 111% from a year ago, and the firm will pay a quarterly cash dividend of $0.01 per share.
Much of the Nvidia’s growth in the past year has been driven by its data centre business and third-quarter revenue for this part of the firm was a record $30.8 billion, up 17% from the previous quarter and up 112% from a year ago.
The firm also reassured investors that its new chip, Blackwell, is on target and will ship this quarter with “very high” demand.
“The age of AI is in full steam, propelling a global shift to NVIDIA computing,” said Jensen Huang, founder and CEO of NVIDIA. “Demand for Hopper and anticipation for Blackwell — in full production — are incredible as foundation model makers scale pretraining, post-training and inference.”
But as well as revenue projections not exciting investors, the costs of production and engineering for the new chip will eat into profit margins. Investors will want to see Nvidia doing everything right with no room for errors.
“The guidance seems to show lower growth, but this may be Nvidia being conservative,” Alvin Nguyen, an analyst at Forrester Research Inc. told Bloomberg. “Short term, there is no worry about AI demand. Nvidia is doing everything they should be doing.”
