Nvidia’s Financial Results Beat Expectations As Sales Grow 56%

Chipmaker Nvidia (NVDA) reported better-than-expected financial results for this year’s second quarter, fueled by 56% year-over-year sales growth. The Silicon Valley-based technology giant announced earnings per share (EPS) of $1.05 U.S., which beat the $1.01 U.S. expected on Wall Street. Revenue in the April through June quarter totaled $46.74 billion U.S., which was ahead of the $46.06 billion U.S. consensus forecast of analysts. Sales were up 56% from a year earlier. Year-over-year revenue has now exceeded 50% growth for nine straight quarters, dating back to mid-2023. However, Nvidia’s data centre revenue, which is fueled by its artificial intelligence (A.I.) microchips, came up short of estimates for a second consecutive quarter. And this year’s second quarter marked Nvidia’s slowest sales growth in two years. Nvidia’s growth is driven by its data centre business that is focused on large quantities of graphics processing units (GPUs). Data centre revenue in Q2 totaled $41.10 billion U.S., below the $41.34 billion U.S. expected on Wall Street. In terms of guidance, Nvidia said that its sales growth in the current quarter will remain above 50% year-over-year, signaling to Wall Street that demand for A.I. infrastructure remains strong. Management said they expect revenue this quarter to be $54 billion U.S., plus or minus 2%. Wall Street was expecting revenue for this year’s third quarter of $53.10 billion U.S. Nvidia’s guidance does not assume any microchip shipments to China, something it is continuing to negotiate with the U.S. government. The company did say that it expects to get U.S. export licenses to ship chips to China after pledging to give the government 15% of the revenue generated from sales to the Asian nation. Nvidia said it sold no microchips to China during the quarter. But executives noted that sales to China could have added $8 billion U.S. to its second-quarter sales had they been allowed. Nvidia said that its new Blackwell chip’s sales rose 17% from the year’s first quarter and now accounts for about 70% of its total data centre revenue. Management highlighted an additional $60 billion U.S. in share repurchases with no expiration date. Nvidia bought back $9.7 billion U.S. of its own stock during the year’s second quarter. Nvidia’s share price has risen 31% this year to trade at $181.60 U.S. per share.