Nvidia’s New Highs

Expectations for Nvidia’s earnings results were extremely high going in, with its market capitalization topping $1 trillion. And yet, somehow, the company continues to deliver. ๐Ÿ˜ฎ

The semiconductor giant’s second-quarter results blew away estimates. Adjusted earnings per share of $2.70 on revenues of $13.51 topped the expected $2.09 and $11.22 billion.

Second-quarter revenues jumped 88% QoQ, driven by data center revenue of $10.32 billion (+171% YoY). Strength in its data centers also drove its adjusted gross margin up 25.3 percentage points to 71.2%. The gaming division revenue rose 22% YoY, but its high-end graphics applications business shrunk 24% YoY. And lastly, automotive growth grew 15% YoY. ๐Ÿ“ˆ

From the numbers, it’s clear that data centers are the key to Nvidia’s success. CEO Jensen Huang said, “The world has something along the lines of about a trillion dollars worth of data centers installed, in the cloud, enterprise, and otherwise. That trillion dollars of data centers is in the process of transitioning into accelerated computing and generative AI.” ๐Ÿ’พ

Nvidia’s A100 and H100 AI chips will play a major role in that transition, but geopolitical concerns remain. While the company does not anticipate being impacted by chip export restrictions, it warned that additional export restrictions on its data center GPUs would have an immediate, material impact on its financial results. Time will tell there. ๐Ÿคท

Looking ahead, executives expect third-quarter revenue of $16 billion, 27% higher than Wall Street’s $12.61 billion expected. That guidance also indicates 170% YoY growth, which is massive, to say the least. It’s the company’s game to lose at this point with these high expectations.ย 

$NVDA shares were up as much as 10% after the bell. As investors digest the news, we’ll see if they can stay above $500 per share tomorrow. ๐Ÿคฉ

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Its adjusted loss per share ofย  $9.83 was worse than the $7.18 expected, while revenues of $454.1 million came in shy of the $471.2 million consensus estimate. Executives don’t expect the sales picture to improve, forecasting fourth-quarter revenues of $565 to $590 million. That’s well below the $633 million Wall Street anticipated.ย 

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Recent IPOs Report Results

Three of the “hottest” IPOs of recent history just released their first earnings results as public companies. Let’s see how they did. ๐Ÿ‘‡

First up is semiconductor equipment maker Arm Holdings. Its adjusted earnings per share of $0.36 on revenues of $806 million topped expectations of $0.26 and $740 million. However, its guidance for the current quarter came in below estimates, at $720 to $800 million vs. $776 million expected. ๐Ÿ”ป

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