When Nvidia (NVDA) -) launched itself into a trillion-dollar market cap last quarter on the tail of an explosive earnings report, the biggest question on investors' minds was whether the semiconductor company would be able to do it again. Turns out, CEO Jensen Huang was able to make magic happen twice. The chip-makers reported adjusted second-quarter earnings Wednesday of $2.48 per share, 10 times higher than last year and well above analyst estimates of $2.08.
The company reported $13.5 billion in revenue for the quarter, smashing analyst expectations of $11.2 billion. It said that it expects to see $16 billion in revenue for the current quarter, handily above Street expectations.
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The stock shot up more than 7% in after-hours trading and is now set to open at an all-time high.
Jim Cramer, a longtime fan of the chip-makers, called the earnings "stunning," saying: "I always tell you you should own Nvidia, don't trade it."
Own it, don't trade it seems to have become something of a theme around Nvidia. Main Street Research's investment chief, James Demmert, said: "this is a company that you've got to own in this new tech bull market. This is the leader."
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Despite the fact that Nvidia is currently trading multiples above its gross revenue, Satori Fund founder and chief investor Dan Niles isn't concerned.
"You have to look at it in terms of how much value do you provide," he said. "The earnings take into account how much value you're adding and Nvidia is the only game in town." The key for Niles is that there is really no competition to Nvidia's position.
And while many investors remain excited over the stock itself, others are looking at this earnings report as a pivotal moment that is indicative of the real trend of artificial intelligence.
We view last night as a historical moment for the broader tech sector and a sneak preview of what is on the horizon after hearing the "guidance heard around the world" from the Godfather of AI-Jensen and Nvidia. A 1995 Internet Moment on the doorstep for the tech sector 🐂🏆🔥💥
— Dan Ives (@DivesTech) August 24, 2023
"Nvidia is not participating in this revolution -- it's leading it, fortified by deep expertise in generative AI and a web of strategic alliances across diverse sectors," Jon Maier, Chief Investment Officer, Global X ETFs said. "The message is clear: As the world recognizes the unparalleled potential of generative AI, Nvidia is perfectly positioned for unparalleled growth, reinforcing its stature as a technological titan."
A year ago, Nvidia shares were trading at around $170. The company's stock has been climbing steadily throughout 2023, spiking heavily in May when it catapulted from a $750 billion market cap into the trillion-dollar market cap club. It is now trading at more than $500 per share pre-market, implying a market cap of $1.25 trillion.
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