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Nvidia’s Q3 Earnings Soar Beyond Expectations, Faces Q4 Challenges Amidst Export Restrictions

‘Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI,’ said CEO Jensen Huang

GPU manufacturer Nvidia has released its fiscal third-quarter results that have exceeded expectations and triggered a 1% dip in its shares during extended trading. The chipmaker’s revenue reached $18.12 billion, surpassing the $16.18 billion expected, with earnings at $4.02 per share, adjusted, compared to the anticipated $3.37 per share. 

The company experienced remarkable growth, with revenue increasing by 206% year-over-year, and net income rising to $9.24 billion, or $3.71 per share, from $680 million, or 27 cents per share, in the same quarter of the previous year.

Nvidia’s data centre revenue notably contributed to this success, totalling $14.51 billion, a 279% increase. Half of the data centre revenue came from cloud infrastructure providers like Amazon, while the rest was derived from consumer internet entities and other large companies. The gaming segment also performed well, contributing $2.86 billion, an 81% increase.

“Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI,” said Jensen Huang (pictured), founder and CEO of Nvidia. “Large language model startups, consumer internet companies and global cloud service providers were the first movers, and the next waves are starting to build.” 

A minor setback

Despite the positive results, Colette Kress, Nvidia’s finance chief reports that the company expects a negative impact in the next quarter due to export restrictions affecting sales to organisations in China and other countries. “We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions,” said Kress in a letter to shareholders.

Nvidia’s stock has also experienced significant growth, rising 241% year-to-date, outperforming the S&P 500 index, which increased by 18% over the same period. The company is actively working on plans to increase supply throughout the next year, with strong demand anticipated as AI adoption expands across various industry verticals.

Looking ahead, Nvidia provided guidance for $20 billion in revenue for the fiscal fourth quarter, implying nearly 231% revenue growth. The company continues to navigate challenges, including competition from AMD and export restrictions affecting GPU sales in China. Analysts remain optimistic about Nvidia’s prospects, citing ongoing GPU demand and the company’s dominant position in Gen AI accelerators.

“Nvidia GPUs, CPUs, networking, AI foundry services and Nvidia AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off,” said Huang. 

This latest financial report continues the trend for Nvidia’s Q2 2024 showing record revenue with boom in AI chip sales. In June, we reported that the company became a trillion-dollar company, joining the elite ranks of Apple and Microsoft.

Written By

Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.

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