Nvidia posted better-than-expected second quarter earnings Wednesday, while unveiling plans for a $50 billion stock buyback, and said demand for its legacy AI chips remains strong ahead of shipments of its new Blackwell line of processors.
Nvidia (NVDA) said adjusted profit for the three months ended in July came in at 68 cents a share, more than double the tally from the year-earlier period and modestly ahead of the Wall Street consensus forecast of 65 cents a share.
Group revenue soared 122% from a year earlier to $30.04 billion, a figure that also topped analysts' consensus estimate of a $28.9 billion tally.
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Data center revenue, which includes the group's main artificial-intelligence effort, rose 154% from a year earlier to a record $26.3 billion. Overall profit margins were pegged at 75.1%, just inside estimates of around 75.7%.
Looking into the current quarter, Nvidia sees revenue in the region of $32.5 billion, again ahead of the LSEG consensus forecast of $31.7 billion.
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"Hopper demand remains strong, and the anticipation for Blackwell is incredible,” said CEO Jensen Huang. “Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”
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“Blackwell samples are shipping to our partners and customers. Spectrum-X Ethernet for AI and Nvidia AI Enterprise software are two new product categories achieving significant scale, demonstrating that Nvidia is a full-stack and data center-scale platform," Huang said.
"Across the entire stack and ecosystem, we are helping frontier model makers to consumer internet services, and now enterprises. Generative AI will revolutionize every industry,” he added.
Analysts had expected Blackwell to begin full shipments in the current quarter, but Nvidia now sees "several billions of dollars" in sales over the final three months of the year.
$NVDA first take: the guidance is much better than investors’ first take (stock down 1%). The company guided revenue up ~3% for October, which includes the negative impact of what appears to be a 2-3 month Blackwell delay. In other words, if there was no delay, the guidance would…
— Gene Munster (@munster_gene) August 28, 2024
The path of Blackwell revenue growth will likely be the biggest topic of conversation on the post-earnings conference call, as the new line offers customers a full rack of chips and processors that perform at higher speed and efficiency in AI functions, while consuming less energy.
Nvidia said it executed a "change to the Blackwell [graphics-processing-unit] mask to improve production yield.", adding that the ramp is "scheduled to begin in the fourth quarter and continue into fiscal 2026."
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“Death, taxes, and Nvidia beats on earnings are three things you can bank on," said Ryan Detrick, chief markets strategist at Carson Group. "Here's the issue: The size of the beat this time was much smaller than we've been seeing."
"Even future guidance was raised, but again not by the tune from previous quarters," he added. "This is a great company that is still growing revenue at 122%, but it appears the bar was just set a tad too high this earnings season.”
Nvidia shares, which have soared more than 160% so far this year, were marked 4.15% lower in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $120.40 each.
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