NVIDIA recently reported its earnings for the past quarter, showing a robust revenue growth in the hundreds of millions for the fifth consecutive quarter. The numbers, including revenue and profit, exceeded analyst expectations, leading to the announcement of a $5 billion stock buyback plan. However, the stock price dropped by as much as 7% in after-hours trading.
Stacy Rasgon, an analyst at Bernstein, believes that the stock price reaction may stem from the expectation that NVIDIA would provide revenue guidance for the current quarter in the range of $33-34 billion. The company, however, provided an estimate of around $32.5 billion. Rasgon noted that there isn’t yet a sign of reduced demand for NVIDIA chips, and the company is still able to meet market demands.
NVIDIA’s CFO, Colette Kress, addressed concerns during the earnings call about delays in delivering chips from supplier Blackwell, stating that NVIDIA expects to generate revenue in the billions from Blackwell in the current quarter. The supply situation has since improved, but demand still outstrips what the company can produce. This trend is expected to continue into next year.
CEO Jensen Huang commented that processing trends are shifting, with Generative AI requiring significantly more power, up to 10-40 times the current level. NVIDIA’s infrastructure investments are poised to meet this demand, promising a worthwhile return on investment.
TLDR: NVIDIA’s earnings exceeded expectations, with a strong revenue growth trend continuing. The company addressed concerns about chip supply delays and highlighted the shift towards increased processing power for Generative AI.
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