AI Darling Nvidia Reported Some Seriously Envy-Inducing Results

AI Darling Nvidia Reported Some Seriously Envy-Inducing Results
Theodora Lee Joseph, CFA

7 days ago2 mins

Mentioned in story

What’s going on here?

Chipmaker Nvidia reported results that could turn the rest of the industry into a green-eyed monster.

What does this mean?

Nvidia’s results were the most anticipated in the chipmaker’s three-decade lifetime. Analysts have more than doubled their expectations for Nvidia’s 2024 books over the last year, while investors have sent the stock up 40% this year alone. Despite that, analysts worried that the US government’s ban on exporting chips to China would have put a clamp on the stateside chipmaker’s sales.

Nvidia stock
Source: Google Finance

Well, looks like they underestimated the stock market machine. Nvidia pulled in $22.1 billion in revenue last quarter, higher than the $18 billion from the one before and trouncing expectations of $20.6 billion. And it said the next round of results will be even spiffier, with sales of $24 billion, well above consensus of $22.2 billion. So with Nvidia already flying past predictions for a while now, it’s no wonder investors have stars in their eyes: the stock was 8% higher just after the news.

Nvidia revenue
Source: Nvidia

Why should I care?

Zooming in: Talk about FOMO.

That chip ban left a nasty dent in Nvidia’s sales and could cause more problems down the road. China is expected to make up less than 10% of its sales, down from 20% last year. And even if stateside sales make up the difference, Nvidia missed the chance at a foothold in the Chinese market. That said, with cloud companies like Microsoft and Amazon as loyal customers, and plenty of governments keen to line their industries with AI solutions, Nvidia’s hardly going it alone.

The bigger picture: Nvidia’s firmly in the squad.

Nvidia has been jostling to become the third-biggest company in the US. Now, investors do have their worries about that whole Big Tech brigade: the US stock market’s been pulled up by only a few tech stocks, which can indicate overinflated prices. At the moment, though, they have profit and projections that seem made of steel, so best not bet on a dot-com-esque bust anytime soon.

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