Semiconductor stocks have rebounded sharply over the last few weeks. But have their earnings improved enough to beat their lowered expectations?
Let’s see what Nvidia had to say.
On the earnings front, adjusted earnings per share of $0.59 missed expectations of $0.69. An inventory charge drove the profit miss due to China’s low demand for data center chips. 🔻
Nvidia’s revenue of $5.93 billion beat the $5.77 billion expected. And while gaming revenue continues to struggle with tough pandemic comps, its data center business saw a 31% YoY increase to $3.83 billion. Driving that demand growth was U.S. cloud service providers and consumer internet companies. Automotive growth of 86% YoY was also a nice kicker, though it remains a tiny portion of the business at $251 million in sales.
Looking ahead, the company expects fourth-quarter revenue of $6.00 billion, just shy of the $6.09 billion consensus view. It continues to adjust to macroeconomic conditions, which are impacting several of its major business lines.
Overall, the after-hours move in $NVDA shares reflects the company’s mixed results. While investors are certainly happy it’s no longer missing estimates by a wide margin, they also recognize the bar was set pretty low. As investors look for signs of a semiconductor cycle trough, we’ll have to see what the coming quarter brings. 🤷