Nvidia posted earnings per share (EPS) of $0.81 on revenue of $35.1 billion, outpacing analysts’ forecasts of $0.74 EPS on $33.2 billion in revenue. The robust performance was fuelled by soaring demand for its high-powered AI chips, which CEO Jensen Huang hailed as the driving force behind what he described as the “age of AI.”
Why is Nvidia stock down?
Nvidia’s revenue continues to surge, rising 94% on an annual basis during the quarter that ended on October 27, which is better than projected, but the company’s growth rate has come down from the blazing-fast 260% or so of a few quarters ago. The $37.5 billion Q4 sales guidance implies a 7% QoQ growth, marking Nvidia’s weakest performance since the quarter ending January 2023.
Nvidia has been the clear frontrunner in the ongoing AI surge, with its shares nearly tripling in 2024, solidifying its position as the most valuable publicly traded company. Many of the company’s end customers, such as Oracle, Microsoft, and OpenAI, have started receiving the company’s next-gen AI chip called Blackwell.
“Every customer is racing to be the first to market,” Nvidia chief financial officer Colette Kress said. “Blackwell is now in the hands of all of our major partners, and they are working to bring up their data centres.”
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Although Nvidia’s forecasted 69.5% YoY revenue growth for Q4 remains impressive, driven by strong demand for its chips powering generative AI systems, it reflects a notable slowdown compared to the 94% growth reported in Q3. Previous quarters had seen Nvidia’s revenue consistently doubling, underscoring the shift in growth momentum.