Nvidia (NVDA) has announced its third quarter earnings, exceeding analysts’ expectations on both revenue and earnings per share (EPS), while providing a more optimistic outlook for the upcoming fourth quarter. The chipmaker projects revenues of approximately $65 billion, plus or minus 2%, outpacing Wall Street’s forecast of $62 billion.
CEO Jensen Huang highlighted the company’s remarkable performance, stating, “Blackwell sales are off the charts, and cloud GPUs are sold out.” He emphasized the accelerating growth of the AI ecosystem, noting that “we’ve entered the virtuous cycle of AI,” with an increasing number of foundation model creators and AI startups emerging across various sectors and countries.
This positive announcement had an immediate impact on Nvidia’s stock, which rose over 5% following the news. Other companies in the AI sector also benefitted, with shares of AMD climbing nearly 4% and Micron (MU) increasing more than 3% in after-hours trading. Major tech players such as Amazon (AMZN), Google (GOOG), Meta (META), and Microsoft (MSFT) also experienced slight increases in their stock prices.
For Q3, Nvidia reported an EPS of $1.30 on revenues of $57.01 billion. This surpassed analyst expectations of an EPS of $1.26 and revenue of $55.2 billion, according to Bloomberg consensus data. Comparatively, the company had reported an EPS of $0.81 and revenues of $35.1 billion for the same period last year.
The company’s data center business performed particularly well, generating $51.2 billion against expectations of $49.3 billion. However, Nvidia’s gaming revenue reached $4.3 billion, just shy of the anticipated $4.4 billion. CFO Colette Kress noted that “Blackwell Ultra is now our leading architecture across all customer categories while our prior Blackwell architecture saw continued strong demand.” She also mentioned that revenue from the China-specific H20 chip was “insignificant.”
This earnings report comes on the heels of Nvidia’s market capitalization briefly surpassing $5 trillion last month, underscoring its significant growth in the AI sector. Interestingly, ahead of the earnings announcement, Peter Thiel’s hedge fund sold its entire $100 million stake in Nvidia, while SoftBank Group (SFTBY) divested its $5.8 billion investment in the company in order to finance its own extensive AI projects.
Additionally, remarks from rival Advanced Micro Devices (AMD) CEO Lisa Su during the company’s Financial Analyst Day suggested that the data center market could reach a value of $1 trillion by 2030, indicating robust competition ahead.
Despite Nvidia’s impressive performance, skepticism remains in the market. Investor Michael Burry, known for predicting the 2008 financial crisis, recently expressed concerns on social media. He alleged that companies like Meta (META) and Oracle (ORCL) may be artificially inflating their earnings by understating the depreciation of their data center equipment.
Year-to-date, Nvidia’s stock has increased by more than 37%, with a 25% rise over the past year. In comparison, AMD has seen an impressive 82% gain year-to-date, with a 58% increase over the last 12 months. This competitive landscape suggests a high-stakes environment as companies vie for dominance in the rapidly evolving AI sector.
See also
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AI Boom Fuels Nvidia’s $4.5 Trillion Valuation Amid Rising Market Risks
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