By John Meyer, consultant in financial affairs – Eurasia Business News, August 29, 2024. Article n°1197.

Shares of chipmaker Nvidia fell after the release of a quarterly report, according to which the company’s revenue more than doubled, reports the Financial Times.

Revenue for the last quarter (to July 28) amounted to $30 billion, which is 122% more than in the same period last year. Analysts expected it to be $28.7 billion, and Nvidia expects to increase revenue to $32.5 billion in the current quarter.

Some investors expected an even higher earnings forecast. The company’s shares in over-the-counter trading fell 8% after the release of the quarterly report, depriving Nvidia of more than $200 billion in market capitalization.

Key Financial Highlights

  • Earnings Performance: Nvidia reported adjusted earnings per share (EPS) of 68 cents, exceeding the anticipated 64 cents. The company achieved a remarkable 154% increase in revenue from its data center segment, which generated $26.3 billion, significantly above forecasts.
  • Future Guidance: For the upcoming third quarter, Nvidia projected revenue of approximately $32.5 billion, which, while above some analyst estimates, was viewed as conservative compared to the extraordinary growth seen in previous quarters. This cautious outlook contributed to the stock’s decline, as it indicated a potential normalization in growth rates

Nvidia’s performance was another record, but the growth rate was well below the 262% revenue jump in the previous quarter. Net profit was $16.6 billion, with gross margin reaching 75.1% compared to analysts’ expectations of 75.5%.

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CEO Jensen Huang emphasized the ongoing demand for Nvidia’s products, particularly in the AI sector, but the stock’s drop suggests that investors are wary of potential slowdowns in growth as the company moves forward.

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In June, it became known that Nvidia became the first computer chip company in history, the market capitalization of which reached $3 trillion. The company overtook Apple and was second only to Microsoft. The last time Nvidia was worth more than Apple was in 2002, five years before the first iPhone came out. At the time, both companies were worth less than $10 billion each. At the end of July, it became known that Nvidia lost $750 billion in market value in six weeks.

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© Copyright 2024 – Eurasia Business News. Article no. 1197.