Nvidia beats expectations in Q2, strong guidance for next quarter, stock drops 7%

From CNBC: 2024-08-28 21:12:43

Nvidia’s fiscal Q2 results surpassed expectations, with revenue hitting $30.04 billion. Adjusted EPS rose to 68 cents, beating estimates of 64 cents. The strong guidance for the next quarter includes a nearly $2.5 billion revenue increase. Despite the positive news, Nvidia stock dropped more than 7%, reflecting high expectations.

CFO Colette Kress said Nvidia’s Hopper chip sales are accelerating, anticipating strong demand for Blackwell, the next-gen AI chip platform. The Blackwell production ramp begins in Q4, generating “several billion dollars” in revenue. Nvidia remains a top semiconductor company amid an AI hardware upgrade arms race, as cloud and tech companies prioritize advanced data center technology.

Software revenue is also booming, expected to reach a $2 billion annual run rate by year-end. Nvidia AI Enterprise contributes significantly to growth. The health care sector is another revenue driver, with AI revolutionizing medical imaging, surgical robots, and drug discovery. These segments are anticipated to become multibillion-dollar businesses, supporting Nvidia’s future growth.

In Q2, Nvidia reported record Data Center segment revenue of $26.27 billion, driven by Compute and Networking sales. Notably, cloud service providers and consumer internet companies contributed over 50% of segment sales. Generative AI, model training and inferencing are driving demand for Nvidia’s innovative offerings, with inferencing responsible for 40% of Data Center revenue over the past four quarters.



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