Nvidia (NVDA) reported third-quarter earnings after the bell on Tuesday that once again beat Wall Street’s expectations as the artificial intelligence boom continues to drive demand for the company’s chips.
The chipmaker reported adjusted earnings per share of $4.02 on revenue of $18.12 billion, beating both analysts’ expectations. Analysts had expected adjusted earnings per share of $3.36 on revenue of $16.1 billion, according to Bloomberg data.
The company’s revenue forecast for the current quarter also beat estimates, coming in at $20 billion, plus or minus 2%; Analysts had forecast $17.8 billion for the fourth quarter.
However, the stock market’s reaction to these results was muted as the company noted that new restrictions on chip exports to China would weigh on results.
“Our sales to China and other affected destinations, derived from products now subject to licensing requirements, have consistently contributed approximately 20-25% of data center revenue in recent quarters,” Nvidia CFO Colette Kress said in a press release.
“We expect our sales to these targets to decline significantly in the fourth quarter of fiscal 2024, although we believe the decline will be more than offset by strong growth in other regions.”
Third-quarter revenue increased 34% quarter-over-quarter and 206% year-over-year, reflecting how increased demand for AI boosted the company’s revenue throughout 2023.
The chipmaker reported data center revenue, including its AI chips, of $14.51 billion; The Street had expected revenue of $12.82 billion for this segment.
Nvidia’s gaming revenue was $2.86 billion in the quarter, also above the $2.7 billion forecast by analysts. Shares of the chipmaker fell about 1% in after-hours trading on Tuesday.
This report comes after the stock closed at a record high of $504.09 per share on Monday, with AI returning to the story amid the ongoing drama surrounding Sam Altman’s departure from ChatGPT maker OpenAI and his move to Microsoft (MSFT). moment for investors). Nvidia shares fell about 0.9% along with the broader market on Tuesday ahead of the earnings release.
The story goes on
Earlier this year, Nvidia shares had a notable upward trend following its earnings release.
In August, the stock hit an all-time high after Nvidia reported second-quarter results that beat Wall Street’s expectations for both revenue and earnings per share, and also topped forecasts that came in above lofty estimates. Back in May, an analyst described the company’s forecast as a “benchmark for eternity.”
The pressure could also have a significant impact on the overall market. Nvidia has been a driver of stock market momentum this year as a key member of the “Magnificent Seven” stocks – along with Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN) and Meta (META) and Tesla (TSLA).
Together, these stocks have gained more than 70% this year through mid-November, while the remaining 493 stocks in the S&P 500 are up 6%.
Julian Emanuel, senior managing director of Evercore ISI, noted Sunday that “it’s still NVDA’s world” and warned investors to be prepared for “post-NVDA volatility” no matter which way the stock swings.
The Nvidia logo under a magnifying glass. (CFOTO/Future Publishing via Getty Images) (Future Publishing via Getty Images)
Josh Schafer is a reporter for Yahoo Finance.
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