Nvidia Shares Fall Nearly 7% in After-Hours Trading
August 28, 2024 07:30 PM EDT
Nvidia shares steadily lost ground in late trading following the release of the earnings report.
One potential reason for the decline: The company’s projection for third-quarter revenue, while topping analysts’ consensus view, may have fallen short of increasingly lofty expectations in recent days.
Nvidia projects revenue in the current quarter of $32.5 billion, plus or minus 2%. That compares with the roughly $31.9 billion Wall Street had estimated and with $18.1 billion posted in the year-ago third quarter.
However, Morgan Stanley had said earlier this week that, in order to satisfy investors, Nvidia was going to have to announce revenue guidance for the fiscal third quarter that was about $2 billion higher than the consensus view among analysts. “(A)ssuming that all is well with new products our sense is that the stock needs guidance in the $33-34 (billion) range to be unchanged,” Morgan Stanley analysts said.
Nvidia shares fell 6.9% to $116.95 in extended trading Wednesday.
Cloud Providers Made Up 45% of Data Center Sales
August 28, 2024 07:11 PM EDT
Chief Financial Officer Colette Kress said roughly 45% of the record data business sales were from cloud service providers.
Consumer, internet, and enterprise company customers accounted for half the data center revenue.
The surge in data center revenue comes as tech giants increase spending to invest in AI infrastructure. The breakdown of what type of customers are driving data center sales to new highs offers insight into the state of AI demand.
–Naomi Buchanan
Hopper Demand Strong Ahead of Blackwell Shipments
August 28, 2024 07:04 PM EDT
Asked during the earnings call about demand for Hopper, the predecessor for the Blackwell chips, Chief Executive Officer Jensen Huang said that Nvidia’s customers “simply can’t afford” to wait on the new AI chips when Hopper adoption will save them money.
He added, that due to the generative AI market, when companies have the opportunity to build advancing computing infrastructure with Hopper, rather than general purpose computing, “that decision is relatively clear.”
Meantime, CFO Colette Kress said that Nvidia expects “several billion dollars” from Blackwell sales in the fourth quarter.
–Naomi Buchanan
Demand for Nvidia’s Blackwell Chip Outpaces Supply
August 28, 2024 06:12 PM EDT
Nvidia CFO Colette Kress said during the earnings call that “demand for Blackwell platforms is well above supply.”
Kress added that Nvidia expects this to continue into next year due to high demand, even as production ramps up and availability improves.
-Kara Greenberg
Retail Investors Bought Big Into Nvidia Before Earnings: Vanda
August 28, 2024 05:34 PM EDT
Retail-investor purchases of Nvidia’s shares ahead of today’s earnings report dwarfed buying of other high-profile tech shares, according to Vanda Research.
Retail investors picked up a net $1.4 billion worth of the shares in the five days through Tuesday, Vanda said. Six companies, led by Tesla, saw net retail purchases of between $100 and $200 million apiece.
“Our data make it very clear that self-directed retail traders have been a key driver of the rebound in Nvidia shares,” Vanda wrote Wednesday afternoon. “But now individuals’ positions look relatively stretched and thus pose a risk to the stock should institutional players show muted appetite.”
-David Marino-Machison
Nvidia Says Plans for New Blackwell AI Chip Still on Track
August 28, 2024 05:11 PM EDT
After concerns about reported delays in Nvidia’s Blackwell AI chip sent Nvidia’s stock price tumbling earlier this month, the chipmaker said Wednesday it began shipping some samples of its Blackwell chip in the second quarter, and expects to “ship several billion dollars in Blackwell revenue” during the fourth quarter as production ramps up.
Nvidia’s highly anticipated Blackwell is expected to help cement its AI leadership, with CEO Jensen Huang previously saying he expects Nvidia’s Blackwell platform could be the “most successful product” in the company’s history.
Compensation, Benefits Drove Nvidia Expense Growth
August 28, 2024 04:58 PM EDT
Compensation and benefit drove growth in expenses at Nvidia in Q2, according to published commentary by CFO Colette Kress.
Operating expenses according to generally accepted accounting principles rose 48% year-over-year and 12% sequentially, according to the commentary, while non-GAAP operating expenses rose 52% and 12%, respectively.
“These increases were largely driven by compensation and benefits, reflecting growth in employees and compensation,” the commentary read.
-David Marino-Nachison
Revenue Performance by Business Segment
August 28, 2024 04:50 PM EDT
Here’s how Nvidia reported its second-quarter revenue and revenue growth by business segment:
- Data center: $26.3 billion, up 16% from Q1 and 154% from last year’s Q2
- Gaming and AI PC: $2.9 billion, up 9% from Q1 and 16% from last year’s Q2
- Professional visualization: $454 million, up 6% from Q1 and 20% from last year’s Q2
- Automotive and robotics: $346 million, up 5% from Q1 and 37% from last year’s Q2
-David Marino-Nachison
Data Center Sales Boosted by Big-Tech Spending
August 28, 2024 04:43 PM EDT
The fresh record in Nvidia’s data center sales—revenue jumped 154% from a year ago to $26.3 billion—comes as many of its big tech customers ramp up spending on infrastructure to support their AI capabilities.
Microsoft, Alphabet, Meta, and Amazon have all told investors they expect to boost spending on AI infrastructure, particularly data centers, and they’re all buyers of Nvidia’s chips.
-Kara Greenberg
Nvidia Board Approves $50 Billion Buyback
August 28, 2024 04:38 PM EDT
Nvidia’s board approved a new $50 billion share buyback plan, the company said in its latest earnings release.
The company had $7.5 billion worth of previously authorized repurchases as of the end of the first half, Nvidia said.
-David Marino-Nachison
Nvidia Sets Revenue Outlook for Third Quarter
August 28, 2024 04:37 PM EDT
Nvidia guided investors toward fiscal third-quarter revenue of $32.5 billion, plus or minus 2%, the company said as part of the release of its latest financial results. Wall Street was looking for roughly $31.9 billion, according to data compiled by Visible Alpha.
Nvidia reported revenue of $18.1 billion in the year-ago third quarter.
-David Marino-Nachison
Nvidia Stock Slips After Results Land
August 28, 2024 04:37 PM EDT
Shares of Nvidia slipped in the minutes shortly after the release of the chip giant’s latest financial results.
Nvidia’s stock was recently down more than 4% in extended trading. It finished Wednesday’s regular session down about 2%, still leaving it up more than 150% for the year so far.
The company said second-quarter revenue was $30 billion, more than double last year’s quarter and higher than Wall Street expected. Diluted earnings per share, at 67 cents per share, also beat the Street’s expectations.
-David Marino-Nachison
Nvidia Results Top Expectations
August 28, 2024 04:31 PM EDT
Nvidia reported fiscal second-quarter earnings and revenue that exceeded analysts’ estimates, as data center revenue reached another record high, driven by surging demand for artificial intelligence.
The AI chipmaker posted second-quarter revenue of $30.04 billion, more than doubling from the same period a year ago. Net income at $16.6 billion also more than doubled from the year-ago period.
While handily exceeding expectations, growth on both the top and bottom lines has slowed from previous quarters.
-Kara Greenberg
How Nvidia Stock Has Reacted to Recent Earnings Reports
August 28, 2024 03:48 PM EDT
Nvidia has blown past market expectations in its two earnings reports in 2024, sending the stock sharply higher.
Shares jumped more than 9% on May 23, the day after the chipmaker reported record quarterly revenue and profit, and announced a 10-for-1 stock split. They went on to rise more than 27% in the following two weeks.
The company’s fiscal 2024 fourth-quarter results were even more explosive. Shares jumped 16% in one day, adding a record $272 billion to the company’s market cap. By the end of the week, Nvidia’s market value had increased by more than $300 billion, and within two weeks its shares had risen more than 30%.
But stellar results aren’t always enough for Wall Street. Nvidia shares fell in late November 2023 when concerns about restrictions on the export of advanced semiconductors to China overshadowed quarterly revenue that exceeded Wall Street’s estimates by nearly $2 billion.
Potential Blackwell Chip Delay Impact
August 28, 2024 03:39 PM EDT
Reported delays of the chipmaker’s next-generation Blackwell system could have a “modest” impact on quarterly results and the near-term outlook, according to analysts at Raymond James.
Morgan Stanley researchers, on the other hand, recently said the impact may be so negligible that executives may “not even acknowledge tactical setbacks.”
Either way, analysts are almost unanimously bullish on the stock’s long-term prospects.
Of the 61 analysts who have rated the stock, 47 have rated it a “buy,” the highest possible rating, according to FactSet. Nine have said they’re “overweight,” a slightly less emphatic endorsement, and five have rated the stock “neutral.” No Wall Street analyst currently has a negative outlook on Nvidia stock.
Nvidia Leads Tech Stocks Lower in Earnings Run-Up
August 28, 2024 03:37 PM EDT
Nvidia shares were down about 1.8% with half an hour to go in Wednesday’s session, leading a broader decline for large-cap tech stocks.
Microsoft (MSFT), Apple (AAPL), Alphabet (GOOGL), Meta Platforms (META) and Amazon (AMZN) were all losing ground. The iShares Semiconductor ETF (SOXX) was down 1.3%.
The company’s stock soared in the weeks after its two most recent earnings reports, giving a boost to the stock market as a whole. Investors will be hoping that another blowout quarterly earnings report can work the same magic on Thursday and reignite the tech rally that has lifted stocks to a series of records this year.
Nvidia’s stock has faced some headwinds in recent months. Shares tumbled more than 25% in July and early August as shifting interest-rate expectations shook up the stock market.
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Shares have since rebounded, though they remain about 10% below their all-time intraday high set in June.
What do Analysts Expect from the Report?
August 28, 2024 03:26 PM EDT
Analysts project revenue will grow to $28.81 billion, according to estimates compiled by Visible Alpha, which would be more than double Nvidia’s revenue in the same period a year ago. Net income is also expected to more than double from a year earlier to $14.93 billion, with a sharp decline in earnings per share (EPS) expected primarily as a result of the company’s 10-for-1 stock split.
Nvidia’s data center segment has grown rapidly amid rising demand for its advanced computing tech to support AI. Data center revenue reached a record high of $22.6 billion in the first quarter of fiscal 2025, surpassing its previous record set the quarter prior.
Analysts expect revenue for the data center business to be $25.17 billion for the fiscal second quarter, which would set a new record high with sales more than doubling from the year-ago period.
Investors will also be looking for updates on reported delays affecting the company’s new Blackwell AI chip. News of the delay sent sent the chipmaker’s stock tumbling earlier this month, though Nvidia has indicated production is still on track to ramp in the second half of the year, as planned.