Nvidia's shares dropped 10.9% despite exceeding earnings estimates and reporting strong revenue growth.

From Nasdaq: 2024-12-20 11:30:12

Nvidia’s shares have dropped 10.9% since their last earnings report. However, the company reported third-quarter earnings of 81 cents per share, surpassing estimates by 8%. Revenues increased by 94% year over year to $35.08 billion, driven by strong sales in the Data Center, Gaming, Professional Visualization, and Automotive segments.

The Graphics segment saw a 16% increase in revenues, while Compute & Networking revenues surged 112%. Data Center revenues jumped 112% to $30.77 billion, with strong demand from cloud providers. Gaming revenues increased 15% to $3.28 billion, and Professional Visualization revenues rose 17% to $454 million.

Nvidia’s non-GAAP gross margin remained at 75%, with operating expenses increasing 50% year over year. Non-GAAP operating income rose 101% to $23.27 billion, while net income margin improved to 57%. The company’s cash, cash equivalents, and marketable securities increased to $38.4 billion.

For the fourth quarter, Nvidia expects revenues of $37.5 billion. Estimates for the stock have been trending upward, leading to a Zacks Rank #2 (Buy). With a VGM Score of B, Nvidia is expected to deliver above-average returns in the coming months.



Read more at Nasdaq: Why Is Nvidia (NVDA) Down 10.9% Since Last Earnings Report?