Nvidia Reports Strong Quarter, Exceeds Expectations
Nvidia said its latest generation of chips are in “great shape” as the world’s most valuable company reported another strong quarter of revenue growth thanks to high demand for the infrastructure that has underpinned the artificial intelligence boom.
Revenue Growth
Revenue for the quarter to the end of October nearly doubled from a year ago, up 94 per cent to $35.1bn, according to a release on Wednesday. It was a slower pace of growth from the previous quarter but still well above analysts’ expectations for $33.25bn.
Blackwell Chips
Analysts have been watching closely to see how Nvidia’s new generation of chips, known as Blackwell, launched earlier this year, might affect short-term revenue growth, and whether the chip is encountering any technical issues as it is implemented at scale.
According to a recent report from The Information, the Blackwell chips have experienced problems with overheating in servers. The chip already faced production issues earlier this year.
CEO Comments
Asked about the report, Nvidia chief executive Jensen Huang said Nvidia was selling more Blackwell products than expected this quarter, exceeding its previous forecast for “several billion” dollars in sales for the fiscal year.
“We will deliver, this quarter, more Blackwells than we had previously estimated, and so the supply chain team is doing an incredible job working with our supply partners to increase Blackwell,” he said. “Blackwell is in great shape.”
Supply Chain Constraints
Constraints in Nvidia’s supply chain, including with its crucial manufacturing partner TSMC, have prompted analysts to question how fast the new chips can be brought online in data centres.
Financial Performance
Gross margins were 75 per cent, in line with consensus estimates. Adjusted net income was $20bn, while earnings per share was $0.78, exceeding analysts’ expectations.
Conclusion
Nvidia’s strong quarter is a testament to the company’s dominance in the AI market and its ability to deliver high-performance chips that meet the growing demand for data centre infrastructure. Despite some technical issues with its new Blackwell chips, Nvidia is confident that it can deliver on its revenue guidance and continue to grow its business.
FAQs
Q: What was Nvidia’s revenue growth for the quarter?
A: Nvidia’s revenue grew 94 per cent to $35.1bn for the quarter to the end of October.
Q: What are the concerns about Nvidia’s Blackwell chips?
A: Some analysts have raised concerns about overheating issues with the Blackwell chips in servers, as well as production issues earlier this year.
Q: What is Nvidia’s guidance for the current quarter?
A: Nvidia has guided for revenue of $37.5bn, plus or minus 2 per cent, for the current quarter.
Q: What is the significance of Nvidia’s earnings for the tech market?
A: Nvidia’s earnings are closely watched as a measure of the health of the overall tech market, with all the biggest tech companies making significant investments in AI.
