NVIDIA Corporation recently released its third-quarter earnings results, showcasing exceptional growth that exceeded analysts’ expectations. The company reported a remarkable revenue of $35 billion, reflecting an impressive 94% increase year-over-year and a 17% rise from the previous quarter. This robust performance resulted in adjusted earnings per share (EPS) of $0.81, surpassing forecasts of $33.2 billion in revenue and $0.74 EPS.
Analyzing the analysts’ oversight regarding NVDA’s performance requires examining previous quarter events. Just three months ago, NVDA shares were valued at $125, and the company announced a revenue of $30 billion—a significant 122% increase year-over-year and a 15% quarter-over-quarter rise. At that time, the company projected revenue for this quarter around $32.5 billion. However, following the announcement, shares initially fell to $101 before rebounding to a closing value above $145. In the past three months, NVDA’s stock has appreciated around 16%, nearly matching its quarter-over-quarter revenue growth of 15%.
In its recent announcement, NVDA revealed revenue of $35.1 billion, exceeding the earlier guidance of $32.5 billion. This marks an accelerated quarterly revenue growth from 15% to 17%, while projecting revenue of $37.5 billion for the upcoming quarter. Such performance indicates a potentially higher quarterly revenue amid consistent demand for NVDA’s chips.
As a co-founder and research director at Insider Monkey, I have been recommending a long position in NVDA since May 2023, and our subscribers have benefited from its positive performance. Personally, I have a modest investment in NVDA shares, and I anticipate that the stock will continue to outperform the market in the next quarter. However, I caution that while NVDA may shine in the short term, its suitability as a long-term investment is debatable, given its significant market capitalization of around $3.6 trillion. If my projections hold, this could surpass $4 trillion in three months, positioning NVDA as a company expected to earn $200 billion annually like Alphabet Inc.
While I recognize NVDA’s potential within the AI investment landscape, I believe certain other AI stocks might offer higher returns over time. For those interested in similar promising AI stocks at a lower valuation, our report highlights one that trades at less than five times its earnings.
In summary, NVIDIA’s impressive earnings showcase the company’s strength in the AI market, reflecting not only its growth trajectory but also the robust demand for its products. As it continues to innovate and adapt within this competitive landscape, investors might find both opportunities and challenges ahead. This resilient growth offers a hopeful perspective for the future, as the ongoing advancements in technology and AI suggest potential for further profitability and innovation.