Chip making giant Nvidia released its third-quarter earnings on Tuesday, once again surpassing Wall Street expectations as the demand for its chips fuelled by the artificial intelligence boom continues to surge.
The reported adjusted earnings per share of $4.02 and revenue of $18.12 billion exceeded analysts’ expectations, with analysts anticipating $3.36 earnings per share on $16.1 billion in revenue. The robust Q3 report card showed a 34 per cent increase in revenue from the previous quarter and a whopping 206 per cent surge compared to the same period last year.
The company’s guidance for the current quarter also outpaced estimates, with a projected revenue of $20 billion, plus or minus 2 per cent, while analysts were foreseeing a fourth-quarter guidance of $17.8 billion.
Nvidia CEO Jensen Huang attributed the growth to the industry’s transition towards accelerated computing and generative AI large language models, with consumer internet companies and global cloud service providers leading the way.
Despite these achievements, Nvidia’s stock saw a 3 per cent decline on Wednesday, a reaction potentially tied to the company’s acknowledgement of new restrictions on chip exports to China impacting its results.
Colette Kress, Nvidia’s CFO, noted that sales to China and other affected destinations, representing about 20-25 per cent of Data Centre revenue, would decline significantly in Q4 of fiscal 2024 due to licensing requirements. However, Kress expressed confidence in mitigating this decline through strong growth in other regions.
Kress expanded on the impact of export restrictions, stating that the fourth-quarter guidance could have been higher without the restrictions. Yet, there’s a possibility Nvidia might collaborate with the US government to launch new products. She acknowledged the uncertainty surrounding the magnitude and duration of the impact on their China business.
