Nvidia, the chip-making giant, unveiled its third-quarter financial results on Tuesday, once again surpassing Wall Street’s expectations, driven by the soaring demand for its chips amid the artificial intelligence boom. The reported adjusted earnings per share of $4.02 and revenue of $18.12 billion outperformed analysts’ projections, who had anticipated $3.36 earnings per share on $16.1 billion in revenue. The robust Q3 report showcased a remarkable 34% increase in revenue from the previous quarter and an impressive 206% surge compared to the same period last year.
The company’s guidance for the current quarter exceeded estimates as well, with a projected revenue of $20 billion, plus or minus 2%, surpassing analysts’ expectations of a fourth-quarter guidance of $17.8 billion. Nvidia CEO Jensen Huang attributed this growth to the industry’s shift towards accelerated computing and generative AI large language models, with leading contributions from consumer internet companies and global cloud service providers.
Despite these achievements, Nvidia’s stock experienced a 3% decline on Wednesday, potentially linked to the company acknowledging new restrictions on chip exports to China impacting its results. Nvidia’s CFO, Colette Kress, noted that sales to China and other affected destinations, constituting about 20-25% of Data Centre revenue, would see a significant decline in Q4 of fiscal 2024 due to licensing requirements. However, Kress expressed confidence in offsetting this decline through robust growth in other regions.
Kress elaborated on the repercussions of export restrictions, indicating that the fourth-quarter guidance could have been higher without these constraints. However, there is a possibility that Nvidia might collaborate with the US government to introduce new products. She acknowledged the uncertainty surrounding the magnitude and duration of the impact on their China business.
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