Nvidia (NVDA) -) blasted second quarter earnings forecasts Wednesday, and predicted AI chip sales would power impressive revenue gains even further over the coming months, as the market leader of the world's hottest technology continues to dazzle Wall Street.
Nvidia said adjusted earnings for the three months ending in July came in at $2.48 per share, up from the 26 cents per share recorded over the same period last year and well ahead of the Wall Street consensus forecast of $2.07 per share.
Group revenues, Nvidia said, soared 87.8% from last year to $13.51 billion, a figure that blasted analysts' estimates of an $11.22 billion tally. Data-center revenue was a record $10.3 billion, Nvidia said, a 53.7% increase from last year, while gaming revenue rose 11% to $2.49 billion.
Looking into the current quarter, Nvidia sees revenue of around $16 billion, plus or minus 2%, a tally that was firmly ahead of the Wall Street consensus of around $11.5 billion.
“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” said CEO Jensen Huang. “NVIDIA GPUs connected by our Mellanox networking and switch technologies and running our CUDA AI software stack make up the computing infrastructure of generative AI."
“During the quarter, major cloud service providers announced massive NVIDIA H100 AI infrastructures," he added. "Leading enterprise IT system and software providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI."
Nvidia shares were marked 9.6% higher in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $516.34 each, an all-time high that would value the Santa Clara, California-based tech giant firmly over the $1.1 trillion mark.
The group also unveiled plans to buyback $25 billion in Nvidia stock in a move designed to return some of its 248% year-to-date advance.
The entire tech sector and overall market was waiting for Nvidia with this being the purest and best barometer for AI demand and the results/guidance were a "drop the mic" moment in our opinion that will have a ripple impact for the tech space for the rest of the year," said Wedbush analyst Dan Ives.
"We view these results and guidance as a historical moment for the tech sector speaking the tidal wave of AI spending now on the horizon over the coming years," he added. "Software, digital media, Big Tech, and of course chips will be the major beneficiaries of this spending with Microsoft in our opinion along with Nvidia the best pure play AI names."
- Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
