Speaking on “Making Money,” Beth Kindig, chief technology analyst at I/O Fund, explains what's causing Nvidia's recent stock price decline.
Artificial intelligence (AI) giant Nvidia released its latest second-quarter earnings report on Wednesday, showing the company's continued AI-driven momentum and beating analyst expectations.
Wall Street expected Nvidia to post earnings per share of $0.64, up 137.5% year over year, on revenue estimated at $28.7 billion, up 112.5% year over year, according to LSEG data. Earnings per share were $0.68 on revenue of $30.04 billion.
Revenue from data center, Nvidia's largest business segment, was expected to rise 144% from last year to $25.15 billion. The company beat expectations in the segment, bringing in sales of $26.27 billion, up 16% from the previous quarter and 154% year over year.
“Demand for Hopper remains strong and our expectations for Blackwell are incredibly high,” Nvidia founder and CEO Jensen Huang said of the company's core chip products and next-generation products.
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Nvidia's second-quarter profit beat Wall Street expectations. (Lauren Elliott/Bloomberg via Getty Images/Getty Images)
“NVIDIA delivered record revenue as data centers around the world work to modernize their entire computing stack with accelerated computing and generative AI,” Huang added.
Ticker Security Last Change Change Rate NVDA NVIDIA CORP. 125.61 -2.69 -2.10%
Analysts have expressed concern about delays in Blackwell's AI chip production, which could result in delayed deliveries and impact revenue in the coming quarters. Huang said in a company statement that Blackwell has started shipping samples, but did not provide a timeline for when it plans to ramp up production beyond 2025.
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Nvidia founder and CEO Jensen Huang said demand for Nvidia's Hopper chip remains strong amid rising expectations for the Blackwell chip. (Annabel Chi/Bloomberg via Getty Images/Getty Images)
“Blackwell samples are shipping to partners and customers. Spectrum-X Ethernet for AI and Nvidia AI Enterprise software are two new product categories that have achieved significant scale, demonstrating Nvidia's full-stack, datacenter-scale platform,” Huang said.
“Across the stack and ecosystem, we're helping cutting edge model makers to consumer internet services and now enterprises. Generative AI will revolutionize every industry.”
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Nvidia CEO Jensen Huang shows off the Blackwell AI chip during a keynote address at the Nvidia GTC artificial intelligence conference at the SAP Center in San Jose, Calif. on March 18. (Justin Sullivan/Getty Images/Getty Images)
Options markets had expected Nvidia's shares to rise or fall 9.8% on Thursday following the results, a move worth more than $300 billion given the company's market capitalization of about $3.11 trillion.
Nvidia shares closed down 2.1% during Wednesday's trading session, meaning the semiconductor giant's shares have risen more than 160% so far in 2024. The closing price of $125.61 was 7.4% below its all-time high set on June 18.
In after-hours trading, Nvidia's shares fell to a low of $116.29 before paring losses to trade around $120 ahead of the earnings release.
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Nvidia also issued a third-quarter revenue outlook that beat Wall Street expectations, predicting third-quarter revenue of $32.5 billion, plus or minus 2%, above analysts' average estimate of $31.77 billion, according to LSEG data.
Reuters contributed to this report.
