Nvidia Corporation (NVDA), the industry leader in graphics processing units (GPUs) and AI computing, unveiled its third-quarter earnings on Wednesday, surpassing Wall Street’s expectations and reinforcing its position as the world’s largest publicly traded company by market capitalization. The company’s earnings per share (EPS) reached $0.81, exceeding the anticipated $0.74, while revenue soared to $35.08 billion, well above the forecasted $33.16 billion.
CEO Jensen Huang articulated the company’s outlook, highlighting the “age of AI” as a driving force behind the significant revenue increase. “The age of AI is in full steam, propelling a global shift to Nvidia computing,” Huang stated, underscoring the robust demand for Nvidia’s Hopper processors and the eagerly awaited Blackwell chips, which are now in full production.
The Data Center segment, Nvidia’s primary revenue source, reported an impressive $30.8 billion, outstripping the expected $28.82 billion and marking a 112% increase from the $14.5 billion earned in the same quarter the previous year. This segment’s growth is attributed to Nvidia’s pivotal role in providing the computational power needed for AI model training and inference across various industries.
Gaming revenue also saw a healthy uptick, reaching $3.28 billion, which was above the $3.03 billion analysts had predicted, and a rise from $2.8 billion in the prior year. This growth reflects Nvidia’s sustained appeal in the gaming sector despite its expansive forays into AI.
Looking forward, Nvidia has projected a fourth-quarter revenue of $37.5 billion, with a potential variance of 2%, slightly surpassing Wall Street’s forecasts of $37 billion. This optimistic outlook has sparked a wave of price target revisions from analysts. Toshiya Hari from Goldman Sachs (GS) increased his price target on Nvidia stock by 15 points to $165, emphasizing the broadening demand for AI infrastructure across various sectors and the anticipation of supply improvements and gross margin stabilization in the latter half of next year.
Jefferies analyst Blayne Curtis was notably bullish, adjusting his target 35 points higher to $185, citing Nvidia’s capacity to meet Blackwell demand and overcome supply constraints. Cantor Fitzgerald’s C.J. Muse maintained a $175 target, suggesting that Blackwell shipments would exceed initial expectations significantly through 2025 and beyond.
Further adjustments include Mizuho’s Vijay Rakesh, who raised his target to $175 from $165, and Needham’s Rajvindra Gill, who lifted his to $160 from $145, both reflecting confidence in Nvidia’s strategic positioning in the AI market.
The stock’s performance in 2024 has been remarkable, with Nvidia shares climbing 200% year-over-year due to the AI boom, showcasing the company’s integral role in technology’s evolution. This earnings report not only confirms Nvidia’s current market strength but also signals its continued dominance in the emerging landscape of AI-driven computing.
Price Action: At last check, Nvidia shares were up 1.68%, trading at $148.34, bringing their year-to-date gains to approximately 195%.
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