Nvidia reported strong quarterly results, with revenue up 56% year over year to $46.7 billion and adjusted EPS of $1.05, beating expectations. The company also announced a $6 billion increase to its share repurchase authorization. Despite a slight drop in after-hours trading, demand for Nvidia’s chips remains strong as it prepares to launch new products. Nvidia’s GPUs are key to the AI revolution, with CEO Jensen Huang expecting record-breaking growth next year. The company sees a massive opportunity in AI infrastructure spending, estimated to reach $3-4 trillion by the end of the decade. Nvidia’s revenue forecast for the current period exceeded expectations, but some investors were looking for an even rosier outlook. The company’s guidance does not include sales of its H20 chip to Chinese customers due to geopolitical uncertainty. With strong demand for its products and a positive outlook on AI infrastructure spending, Nvidia remains a solid long-term investment. Finance chief Colette Kress highlighted the strong demand for Nvidia’s Blackwell chips, with cloud customers expected to invest $600 billion in data center architecture. The transition from the GB200 to the GB300 chip is expected to improve performance, driving growth for the company. Nvidia’s GB300 production shipments are underway, with a focus on sales to neoclouds, enterprises, and sovereigns. The transition from GB200 to GB300 has been seamless, with manufacturing ramping up to 1,000 racks per week. The GB300 offers a 10x increase in inference performance compared to the H100.
Energy efficiency gains with Blackwell chips versus Hopper are highlighting the total cost of ownership benefits of Nvidia’s technology. The GB300 can deliver a 10x increase in tokens per watt, reducing power consumption while increasing compute output. Efficiency gains enable companies to monetize compute at unprecedented scale, driving revenues.
Nvidia has received licenses to resume H20 sales to China, but nothing has been shipped yet due to geopolitical uncertainties. The company saw a $4 billion sequential decline in H20 sales and has not included any H20 sales to China in its outlook. Nvidia is working towards approval of Blackwell chips in China, which could represent a $50 billion opportunity this year.
Nvidia’s third-quarter guidance includes revenue of $54 billion and adjusted gross margins expected to be 73.5%. The company is not assuming any H20 shipments to China in this outlook. Nvidia continues to advocate for American tech companies to lead and win the AI race, emphasizing the importance of American tech in the global standard. Adjusted operating expenses for the fiscal third quarter are expected to be around $4.2 billion, in line with expectations. Subscribers to CNBC Investing Club with Jim Cramer receive trade alerts before he makes a move. Jim follows a waiting period of 45 minutes after issuing an alert, or 72 hours after discussing a stock on CNBC, before trading. Please refer to terms and conditions for more information.
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1. The latest job report shows that the U.S. economy added 943,000 jobs in July, exceeding expectations. The unemployment rate also dropped to 5.4%, the lowest since the start of the pandemic.
2. Tesla’s stock jumped 4% after announcing plans to split its stock, making it more accessible to retail investors. This decision comes as Tesla continues to dominate the electric vehicle market.
3. Apple is set to release its new iPhone 13 lineup this fall, with expectations of improved cameras and performance. The tech giant is hoping these new features will drive sales and maintain its position as a market leader in smartphones.
4. Amazon announced plans to hire 55,000 corporate and technology employees globally. The e-commerce giant is looking to expand its workforce as it continues to see strong growth in online retail and cloud computing services.: Nvidia shares fall on a strong but not impenetrable quarter. There’s still so much to like