Nvidia released its most recent quarterly results on August 28, surpassing Wall Street forecasts and its own guidance, with CNBC highlighting stronger-than-expected guidance for Q2.
Key figures include:
- Q2 2024 revenue: $30 billion — up 122% from the previous year’s $13.5 billion — and $1.3 billion more than analysts’ consensus of $28.7 billion for the quarter ending July 31, according to London Stock Exchange Group.
- Data center revenue: $26.3 billion — up 154% from the year before and $1.1 billion more than StreetAccount expectations.
- Q2 2024 net income: $16.6 billion — up 168% from the year-ago period, noted CNBC.
- Q2 2024 adjusted earnings per share: 68 cents — up 152% from the year before and four cents per share more than the analyst consensus of $0.64, according to Seeking Alpha.
- Q3 2024 revenue guidance: $32.5 billion — up 80% from the year before and $700 million more than the $31.7 billion analysts’ consensus, according to CNBC.
CEO Jensen Huang described the demand for Nvidia’s Blackwell chips as “incredible” in a press release. He also noted, “Global data centers are rapidly upgrading their entire computing infrastructure with accelerated computing and generative AI.”
Nvidia reported that it shipped Blackwell chip samples during the quarter and made adjustments to enhance manufacturing efficiency. CFO Colette Kress stated, “We anticipate generating several billion dollars in Blackwell revenue in the fourth quarter.”
According to the Wall Street Journal, Nvidia attributed a drop in gross profit margins between the first and second quarters of 2024 to product issues. Specifically, the company’s gross margin for the second quarter was 75.1%, down 3.3 percentage points from the previous quarter.
For the entire fiscal year, Nvidia, which has authorized $50 billion in share buybacks, anticipates gross margins will be in the “mid-70% range,” slightly below the StreetAccount consensus of 76.4%, according to CNBC.
Nvidia also anticipates that Hopper, its current-generation chip, will boost total shipments over the next two quarters.
Why Customers Buy Nvidia Chips
Customers are seeing quick returns on their investments in Nvidia’s chips. “Those investing in Nvidia infrastructure are getting immediate returns,” Huang mentioned during an analyst call. “It offers the best ROI for computing infrastructure investments today.”
What drives Nvidia’s return on investment? Despite higher prices compared to competitors, Nvidia’s chips offer superior performance and lower operational costs, leading to a lower total cost of ownership, as detailed in my new book, Brain Rush.
Why Nvidia Stock Dropped
Although Nvidia’s performance is strong, the company’s growth rate is slowing. For instance, the AI chip designer’s earnings grew at an average of 500%, while revenues increased by 206% to 265% over the previous three quarters, according to Investor’s Business Daily.
Nvidia’s forecast of 80% revenue growth for the third quarter represents a significant slowdown from previous rates. “It seems the expectations were set too high this earnings season,” Ryan Detrick, chief market strategist at Carson Group, told the Associated Press.
“Death, taxes, and NVDA beating earnings are reliable, but this time the beat was smaller than usual. Future guidance was also raised, but not to the extent seen in previous quarters,” he added.
Src: www.forbes.com
Comments are closed.