Analysts still disappointed
Nvidia achieves record sales again
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US investors are eagerly awaiting Nvidia's quarterly figures. The chip giant is once again delivering record results. However, expectations are so high that analysts are disappointed this time. The stock market price is falling significantly.
Thanks to the ongoing boom in artificial intelligence (AI), Nvidia's rapid growth remains unbroken for the time being. “Nvidia has achieved record sales as data centers around the world upgrade for AI,” said company CEO Jensen Huang. However, the world's largest provider of high-performance AI chips was unable to meet investors' high expectations with its outlook. Shares then fell about three percent in after-hours trading on Wall Street. However, they were still a good 150 percent above the level at the turn of the year.
According to the information, group sales rose by 122 percent to $30 billion in the past quarter. This was the fifth quarter in a row that the company grew by a triple-digit percentage. Analysts had expected an increase of 112 percent. Adjusted earnings rose 152 percent to $0.68 per share in the reporting period. However, due to the high costs of expanding production capacity, the profit margin of 75.7 percent fell just short of market expectations.
For the current quarter, Nvidia announced revenues of $32.5 billion, plus or minus two percent, and an adjusted operating profit margin of 75 percent, plus or minus half a percentage point. Analysts had forecast sales of $31.69 billion and a profit margin of 75.5 percent. “We are encountering the law of large numbers here,” said Michael Schulman, chief investor at asset manager Running Point. “Once a company reaches a certain size, it can no longer sustain the same growth.”
Flagship processor Blackwell goes on sale
Nvidia boss Huang also announced that the first copies of the AI processor Blackwell would be delivered. Technical problems had delayed the market launch of the most modern version of these high-performance chips. At the same time, demand for the previous generation Hopper remains high, emphasized Huang.
Regardless, US sanctions against China dampened Nvidia's growth prospects, said analyst Jean-Paul van Oudheusden from online broker eToro. “China's limited access to advanced AI chips limits Nvidia's market opportunities. Strategic adjustments are unavoidable, which in turn could lead to additional costs.”
Nvidia has already developed several scaled-down China versions of its AI chips. Nvidia also has to fend off growing competition. AMD wants to reduce its gap to the world market leader with the help of acquisitions. But startups like stock market aspirant Cerebras also want to get a slice of the cake. According to a newspaper report, Huawei will soon be bringing a new generation of AI chips onto the market in China.
