Nvidia Corporation (NASDAQ: NVDA) exceeded estimates with its quarterly performance report on Wednesday. This momentum off the mic, as described by Reuters, led to a 6.5% increase in its New York stock in extended trading, adding to gains this year during which it became the fifth-largest U.S. publicly traded company on the stock exchange to join the trillion-dollar club whose members are Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet (NASDAQ: GOOG) and Amazon.com Inc (NASDAQ: AMZN).
Additionally, Nvidia’s jaw-dropping quarter also lifted other Big Tech stocks, including Microsoft which is looking to get its hands on more Nvidia chips, with its shares rising 1.9% during extended trading. Meta Platforms (NASDAQ: META) shares also rose 2.1%. A new era of computing has begun, and Nvidia is enjoying the results of its bold decision to invest heavily in the production of chips that power artificial intelligence systems long ahead of its rivals Intel Corporation (NASDAQ: INTC), Advanced Micro Devices (NASDAQ: AMD ) and Micron Technologies Inc. (NASDAQ:MU) which focused on serving markets with existing demand.
Outstanding second quarter results
For the quarter ended July 30, Nvidia’s adjusted revenues were $13.51 billion, topping Refinitiv’s consensus estimate of $11.22 billion. Sales hit a record as they more than doubled, increasing 88%.
The data center business, whose production includes the A100 and H100 AI chips needed to build and run AI applications such as the Microsoft-backed ChatGPT, grew 171% year over year to $10.32 billion, according to data from Refinitivs. dollars, well above analysts’ estimates of $7.69 billion. .
The games segment grew 22% year over year to $2.49 billion, topping Refinitiv’s consensus estimate of $2.4 billion.
On the other hand, Nvidia is spending heavily to secure its long-term supply needs as it reported a 53% increase to $11.15 billion in inventory commitments from the previous quarter.
Net income still skyrocketed from the comparable quarter last year ($656 million, or 26 cents per share) to $6.19 billion, or $2.48 per share. Adjusted earnings were $2.70 per share, beating Refinitiv’s consensus estimate of $2.09.
Third quarter outlook
While Refinitiv’s consensus estimate for revenue was $12.61 billion, Nvidia forecast revenue about 2% up or down by $16 billion as it expects sales to continue to climb by about 170% on an annual basis. Adjusted gross margin is expected at 72.5%, plus or minus 50 basis points, while Refinitivs’ consensus is 70.4%.
Analysts expect Nvidia’s data center revenue in fiscal 2025 to top $40 billion on its leadership in chips and AI software to power those chips while powering products like ChatGPT that Microsoft has built into its offerings 365. ChatGPT alone was trained using 10,000 graphics processing units from Nvidia which created a supercomputer built by Microsoft.
The strong second-quarter results reflect Nvidia’s dominance in the AI chapter
Global demand for Nvidia chips is likely to continue to escalate, so Nvidia’s main job is to secure the supply chain to meet that demand. While its rival Advanced Micro Devices is expected to snatch some market share next year with its key AI chip, Nvidia’s software still has a year of head start under its belt. As Wedbush analysts Daniel Ives commented, Nvidia is the purest and best barometer for AI demand and its latest quarterly results wrecking Wall Street, more ambitious estimates could have a knock-on impact on the tech industry now has undoubtedly opened a new chapter in the history of computing. .
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This article Amazing Nvidia AI-Powered Quarter Marks Official Beginning of New Computing Era originally appeared on Benzinga.com
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