Nvidia stock rises to a record high as earnings and expectations crush expectations

Nvidia stock rises to a record high as earnings and expectations crush expectations

Nvidia (NVDA) reported second-quarter earnings after the bell on Wednesday blew the graphics-chip giant’s already high expectations as the AI ​​hype train continues to drive markets forward.

The company reported revenue of $13.51 billion, up 101% from last year, while adjusted earnings were $2.70 per share, up 429% from last year. Analysts had expected revenue of $11.04 billion and total earnings per share of $2.07, according to data from Bloomberg.

Nvidia also issued guidance for current quarter revenue of $16 billion, plus or minus 2%, which is far ahead of Wall Street’s already lofty forecast of $12.5 billion in revenue.

Shares of the graphics chip maker rose as much as 9% in after-hours trading Wednesday to a record high of $515 per share.

Nvidia’s report was seen as a major test of the ongoing hype cycle around artificial intelligence, which has had companies from all walks of life diving into the technology in hopes of capitalizing on the mania. But none of them have seen the actual fortunes of their businesses change to the extent that Nvidia is already enjoying.

“A new era of computing has begun,” said Nvidia CEO Jensen Huang he said in a statement.

“Companies around the world are moving from general purpose to accelerated computing and generative AI.”

By segment, Nvidia reported data center revenue of $10.3 billion and gaming revenue of $2.5 billion, beating expectations of $8 billion and $2.4 billion, respectively.

Investors were already expecting Nvidia to have a strong quarter, after the company said revenue in its latest report would be around $11 billion, plus or minus 2%.

Huang added, “During the quarter, major cloud service providers announced massive NVIDIA H100 AI infrastructures. Leading enterprise software and IT system providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI.”

TAIPEI, TAIWAN - 06/01/2023: Jensen Huang, President of NVIDIA holds a Grace hopper chip CPU used in generative AI at the supermicro keynote presentation during COMPUTEX 2023. COMPUTEX 2023 runs from May 30 to June 02, 2023 and gathers more More than 1000 exhibitors from 26 different countries with 3000 booths to display their latest products and sign orders with foreign buyers.  (Photo by Walid Barazig/SOPA Images/LightRocket via Getty Images)

Jensen Huang, president of NVIDIA, holds a Grace hopper super-chip CPU used in generative AI at the supermicro keynote presentation during COMPUTEX 2023. (Photo by Walid Birazj/SOPA Images/LightRocket via Getty Images)

The rapid increase in demand for Nvidia chips has led some on Wall Street to question whether its main supplier TSMC can produce as many graphics processors as Nvidia customers need.

The AI ​​craze began to peak in November 2022 when OpenAI first launched its innovative AI application ChatGPT.

Although AI has been around for some time, ChatGPT’s popularity as one of the fastest growing applications in history has put the technology firmly on Wall Street’s radar.

Since then, technology companies ranging from Microsoft (MSFT) and Google (GOOG, GOOGL) to Meta (META) have debuted or announced that they are working on their own generative AI tools and software.

Sign up for the Yahoo Finance newsletter.

Sign up for the Yahoo Finance newsletter.

Daniel Holly He is the Technology Editor at Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter @Daniel Holly.

Click here for the latest technology business news, reviews and helpful articles on technology and gadgets

Read the latest financial and business news from Yahoo Finance

Leave a Reply

Your email address will not be published. Required fields are marked *