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Nvidia earnings crush Wall Street estimates again, company tempers China outlook

Nvidia earnings crush Wall Street estimates again, company tempers China outlook

Nvidia (NVDA) reported its third-quarter earnings after the bell on Tuesday that beat Wall Street expectations as the artificial intelligence hype cycle remains in the spotlight for investors.

The chipmaker reported earnings per share of $4.02 and revenue of $18.12 billion, both of which beat analysts’ expectations. Analysts had expected earnings per share of $3.36 and revenue of $16.1 billion, according to Bloomberg data.

The company’s revenue guidance for the current quarter was $20 billion, plus or minus 2%; Analysts had been projecting fourth-quarter guidance of $17.8 billion.


New restrictions on chip exports to China had been a concern when included in the report and Nvidia CFO Colette Kress confirmed that they will affect the company’s sales in the future.

“Our sales to China and other affected destinations, derived from products that are now subject to licensing requirements, have consistently contributed approximately 20% to 25% of data center revenue in recent quarters,” Kress said in a statement.

“We expect our sales to these destinations to decline significantly in the fourth quarter of fiscal 2024, although we believe the decline will be more than offset by strong growth in other regions.”

The chipmaker reported data center revenue, which includes its AI chips, of $14.51 billion. The Street expected revenue of $12.82 billion. Nvidia’s gaming revenue totaled $2.86 billion during the quarter, also above the $2.7 billion analysts had projected.

Shares of the chipmaker fell about 1% after the close on Tuesday.

This report comes after the stock closed at an all-time high of $504.09 per share on Monday, with AI once again becoming the story of the moment for investors amid the ongoing drama surrounding the Sam Altman’s departure from ChatGPT maker OpenAI and his decision to join Microsoft (MSFT). ).

Nvidia shares have moved significantly following the release of this year’s results. In August, shares hit an all-time high after Nvidia reported second-quarter results that beat Wall Street’s expectations for both revenue and earnings per share, as well as guidance that beat lofty estimates. In May, one analyst called the company’s forecast “a guide for the ages.”

Printing could also have important implications for the broader market. Nvidia has been a stock market driver this year as a key member of the “Magnificent Seven” stocks, along with Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta ( META) and Tesla (TSLA).

Collectively, these stocks have gained more than 70% this year through mid-November, versus a 6% gain for the remaining 493 S&P 500 stocks.

Evercore ISI Senior Managing Director Julian Emanuel noted Sunday that “it’s still NVDA’s world” and warned investors to be prepared for “post-NVDA volatility” no matter which way the stock turns.

The Nvidia logo under a magnifying glass. (CFOTO/Future Publishing via Getty Images)

Josh Schafer is a Yahoo Finance reporter.

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