Nvidia reported earnings that surpassed expectations in sales and profits, while delivering a solid forecast for the current quarter. However, after market shares lose up to 2.6% on Wall Street: what are the reasons?
The company linked to Artificial Intelligence generated revenues of US$35,080 million compared to the US$33,160 million expected. Nvidia said it expects about $37.5 billion, plus or minus 2%, in sales for the current quarter, compared to the $37.08 billion expected by analysts surveyed.
Revenue continues to rise at Nvidia, increasing 94% year-over-year during the quarter ending October 27. However, one of the indicators that could generate pessimism in the market is the consecutive slowdown compared to the previous three quarters, when sales increased by 122%, 262% and 265% respectively.
According to its report, net income during the quarter increased to $19.3 billion, or 78 cents per share, compared to $9.24 billion, or 67 cents per share, in the same period a year earlier.
What is Nvidia and why is it still booming?
Nvidia was the main beneficiary of the current artificial intelligence boom. Shares have nearly tripled so far in 2024, making it the most valuable publicly traded company. This has been driven by Nvidia’s data center business, which records sales of artificial intelligence processors and related parts, and which now represents the vast majority of Nvidia’s revenue.
“The AI era is in full swing, driving a global shift towards computing [con microprocesadores] Nvidia. The demand for Hopper and the anticipation for Blackwell, in full production, is incredible as basic model creators expand pre-training, post-training and inference,” said Huang, founder and CEO of the company, through a release.
“AI is transforming all sectors, companies and countries. Companies are adopting AI to revolutionize workflows. Investments in industrial robotics increase with advances in physical AI. And countries have become aware of the importance of developing their national AI and infrastructure,” he added.
In which areas Nvidia excelled
The star division of the company is data centers, key to cloud computing that fuels generative artificial intelligence and a multitude of vital computer processes. Third quarter revenue from that area reached a record figure of US$30.8 billion, 112% more than a year ago. Nvidia is the provider of the large cloud computing operators: Azure, from Microsoft; AWS, from Amazon, and Google Cloud, from Alphabet. It also supplies its microprocessors to other technology giants.
The other business units (focused on video games, professional visualization and automation and robotics) have also been growing strongly, with rates ranging from 15% to 72% year-on-year.
In the accumulated of the first nine months of the year, Nvidia accumulates revenues of US$91,166 million, with a growth of 135%. As for profits, they grew 191% in those first nine months, up to US$50,789 million. This year’s net profits exceed last year’s turnover, which gives an idea of the company’s astronomical growth.
Source: Ambito
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