Nvidia shares rise after earnings top estimates, guides to $108 billion in revenue next quarter

Nvidia shares rise after earnings top estimates, guides to $108 billion in revenue next quarter The tech bellwether reported fiscal second-quarter results after the bell on Wednesday. - Nvidia topped top- and bottom-line Street estimates for its fiscal second quarter. - The company guided to $108 billion in revenue for the next quarter, against forecasts of $103.9 billion. - Shares were higher after a modest decline immediately following earnings, in active after-hours trading on Wednesday. Nvidia’s Total quarterly revenue of $96.2 billion beat consensus forecasts for $92.27 billion. Data center revenue was $89 billion versus estimates for $85.4 billion. Meanwhile, earnings per share of $2.22 beat estimates for $2.09. Shares of the tech giant were up about 4% in after-hours trading while bitcoin “AI has reached its inflection point,” said CEO Jensen Huang. “Now compute is revenue … And demand is accelerating.” Third-quarter revenue guidance was $108 billion versus Street forecasts for $103.9 billion. The $100 billion level is significant, as only 9 S&P 500 companies have previously reported $100 billion or more in quarterly revenue. Gross margin for the next quarter, however, was guided to 74%, down from 75% in the second quarter, which likely weighed on the shares immediately after the earnings news came out. Thomas Monteiro, senior analyst at Investing.com, said Nvidia’s results point to growing pressure on profit margins as memory, financing and infrastructure costs rise. He said October guidance for a 74% margin marked the first sequential decline of the current cycle, with higher memory prices posing a risk to assumptions that margins can remain in the mid-70% range. The company may also have less room to pass costs on to customers, according to Monteiro, as major technology companies face higher spending and borrowing costs of their own. "Overall, looking back, this was a great quarter by almost any measure, but one that also forces a rethink of Nvidia's trajectory over the medium term,” Monteiro said. "The long-term AI opportunity remains intact, though. The question is how much of that growth can translate into margins and cash flow along the way." During a call with investors following the earnings release, Nvidia CEO Jensen Huang pointed to some of the cost and supply pressures behind that debate. Jensen said the company is working with memory suppliers and securing capacity across power, land and data-center infrastructure as it tries to meet demand that exceeds available supply. He also referenced a price increase set to take effect in the first quarter, arguing that customers can generate strong returns from Nvidia systems, which could give the chipmaker some room to pass on higher costs. UPDATE (August 26, 21:35 UTC): Adds comments from Investing.com senior analyst Thomas Monteiro. UPDATE (August 26, 21:45 UTC): Adds comments from CEO Jensen Huang during the company’s earnings call. - 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield. Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield. Why it matters: Anvil is a shared on-chain collateral layer built on a programmable letter of credit: reserve assets as a guarantee -no loan, no interest, keep custody & yield.