The artificial intelligence (AI) chip giant Nvidia released its latest quarterly financial report on Wednesday, August 28th, exceeding expectations as its sales more than doubled to reach a record high of $30 billion for the quarter. Despite this strong performance, the revenue growth forecast for the third quarter fell short of market expectations, causing the company’s stock price to drop by around 8% in after-hours trading in New York.
On Thursday, August 29th, Nvidia’s stock price dropped by approximately 4% in early trading, with the closing price at $117.59, a decrease of $8.02 (6.38%) before the deadline.
However, Nvidia’s stock price has still risen by about 160% in 2024, pushing its market value above $3 trillion, making it one of the big winners in the U.S. market.
After Nvidia’s impressive performance that previously surprised the entire market, investors’ expectations for the company have grown beyond merely surpassing expectations, stirring up market fluctuations once again.
According to the Financial Times, Nvidia’s revenue reached $30 billion in the three months leading up to July 28th, a 122% year-on-year increase, surpassing analysts’ projected $28.7 billion. For the third quarter, Nvidia forecasts revenue of $32.5 billion, with a range of plus or minus 2%, slightly above analysts’ consensus expectations.
Nvidia CEO Jensen Huang stated during the announcement of the latest financial report, “Generative AI will fundamentally transform all industries.”
BBC quoted Simon French, an analyst at the UK stockbroker and investment bank Panmure Gordon, who said, “If you set expectations so high, then you have to maintain an astonishing growth rate.”
French added that while the current AI chip Hopper is selling well, the next generation Blackwell chip “is facing some production delays, which may be one of the reasons Wall Street is selling off the stock in after-hours trading.”
Matt Britzman, a stock analyst at Hargreaves Lansdown, mentioned that it’s no longer just about exceeding expectations. He said, “The market expects them to thoroughly surpass expectations, and today’s level of beating expectations seems to be somewhat disappointing.”
Nvidia’s CFO Colette Kress mentioned during Wednesday’s earnings conference that Nvidia is collaborating with TSMC to manufacture chips and has made adjustments to the production process of Blackwell to improve manufacturing yield.
She added, “Production of Blackwell is set to ramp up starting in the fourth quarter and continuing through the 2026 fiscal year. We anticipate shipping billions of dollars’ worth of Blackwell chips in the fourth quarter.”