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Nvidia Co-Founder and CEO Jensen Huang arrives at a Senate bipartisan Artificial Intelligence Insight Forum in Washington on Sept. 13, 2023.
Sarah Silbiger | Bloomberg | Getty Images
Nvidia shares slid 2% in extended trading on Tuesday after the chipmaker reported fiscal third-quarter results that surpassed Wall Street’s predictions. But the company called for a negative impact in the next quarter because of export restrictions in China and other countries.
“We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions,” Nvidia’s said in a letter to shareholders.
Here’s how the company did, compared to the consensus among analysts surveyed by LSEG, formerly known as Refinitiv:
- Earnings: $4.02 per share, adjusted, vs. $3.37 per share expected
- Revenue: $18.12 billion, vs. $16.18 billion expected
Nvidia’s revenue grew 206% year over year during the quarter ending Oct. 29, according to a statement. Net income, at $9.24 billion, or $3.71 per share, was up from $680 million, or 27 cents per share, in the same quarter a year ago.
During the quarter, Nvidia announced the GH200 GPU, which has more memory than the current H100 and an additional Arm processor onboard. The H100 is expensive and in demand. Nvidia said Australia-based Iris Energy, an owner of bitcoin mining data centers, was buying 248 H100s for $10 million, which works out to about $40,000 each.
As recently as two years ago, sales of GPUs for playing video games on PCs were the largest source of Nvidia’s revenue. Now the company gets most revenue from deployments inside server farms. Analysts polled by StreetAccount expect Nvidia’s data center revenue to come in at $12.97 billion, which would work out to a 239% increase.
The introduction of the ChatGPT chatbot from Microsoft-backed startup OpenAI in 2022 caused many companies to look for ways to add similar generative AI capabilities to their software. Demand for Nvidia’s GPUs strengthened as a result.
Nvidia faces obstacles, including competition from AMD and lower revenue because of export restrictions that can limit sales of its GPUs in China.
Some analysts said ahead of Tuesday’s report that they were anticipating another quarter of outperformance from Nvidia.
“GPU demand continues to outpace supply as Gen AI adoption broadens across industry verticals,” Raymond James’ Srini Pajjuri and Jacob Silverman wrote in a note Monday to clients, with a “strong buy” recommendation on Nvidia stock. “We are not overly concerned about competition and expect NVDA to maintain >85% share in Gen AI accelerators even in 2024.”
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
This is breaking news. Please check back for updates.
WATCH: The major risk to Nvidia earnings is its relationship with China, says Degas Wright
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