Nvidia’s CEO Jensen Huang made a notable appearance at the launch of their latest supercomputer, Gefion, in Kastrup, Denmark, on October 23, 2024. Concurrently, the company announced impressive third-quarter earnings that surpassed analyst expectations for both sales and earnings, while also offering a positive forecast for the upcoming quarter. This performance reflects Nvidia’s ongoing growth amidst high demand for its advanced artificial intelligence chips.
In extended trading, shares saw a slight decline of 2%. When comparing Nvidia’s results to expectations from LSEG analysts, the company reported an adjusted earnings per share of 81 cents, beating the anticipated 75 cents, and revenue of $35.08 billion, exceeding the expected $33.16 billion.
Nvidia projects sales for the current quarter to reach about $37.5 billion, which is slightly higher than analyst forecasts of $37.08 billion. The anticipated growth represents a significant year-over-year increase of about 70%, although it depicts a deceleration compared to the staggering 265% growth observed in the same quarter last year.
The company’s revenue saw a remarkable increase of 94% year-over-year for the quarter ending October 27, though this reflects a decline from previous quarters’ growth rates of 122%, 262%, and 265%, respectively. This growth trajectory positions Nvidia as a key player in the booming artificial intelligence market, with its stock nearly tripling in value throughout 2024, cementing its status as the most valuable publicly traded company.
A major contributor to this success is Nvidia’s data center business, which earned $30.8 billion—a substantial 112% increase from the previous year and surpassing analyst expectations of $28.82 billion. Notably, this revenue includes approximately $3.1 billion derived from networking parts, which underscores the diverse portfolio of Nvidia’s offerings.
The net income for the quarter rose to $19.3 billion, or 78 cents per share, compared to $9.24 billion or 67 cents the previous year. Nvidia’s gross margin improved to 73.5%, slightly exceeding analysts’ estimates, attributed mainly to increased sales of data center chips.
As for upcoming products, clients like Microsoft, Oracle, and OpenAI have started to receive the next-generation AI chip, Blackwell, with 13,000 samples shipped so far. Huang confirmed that Blackwell is now in full production, indicating that all key partners are swiftly working on deploying it in their data centers. Kress indicated that demand for Blackwell is expected to be high, potentially exceeding supply for several quarters ahead.
In addition to AI advancements, Nvidia’s gaming revenue reached $3.28 billion, outperforming expectations of $3.03 billion. This growth stems from heightened demand for GPUs for personal computers and laptops, as well as increased revenue from game console chips, including those that power the Nintendo Switch.
Nvidia’s automotive segment also saw substantial growth, with sales climbing to $449 million, reflecting a 72% annual increase, largely driven by self-driving car technology. The professional visualization segment accounted for $486 million, up 17% year-over-year.
When questioned about potential tariffs under the new administration, Huang assured stakeholders that Nvidia would comply with all regulations, whatever the outcome.
In summary, while Nvidia experienced a minor drop in shares post-announcement, the company’s robust earnings and optimistic forecasts paint a positive outlook for the future. The ongoing advancements in AI and gaming sectors position Nvidia well within the technology landscape, and their commitment to compliance reflects a strategic approach to navigating potential regulatory challenges. As they continue to innovate, both their financial health and market position appear promising.