Nvidia Share: Quarterly results better than expected, yet shares fell more than 7 percent
Nvidia Share: On Wednesday, chipmaker company Nvidia released its second-quarter results. The quarterly results were much better than analysts estimated. The company's revenue grew by 122 percent in the second quarter. Despite the excellent quarterly results, the company's shares fell more than 7 percent. Let us know the reason for the sell-off in the shares in this article.
Chipmaker company Nvidia announced its quarterly results on Wednesday. The quarterly results had an effect on the company's shares, too. Although it was considered much better than the expected quarterly results, guidance and indications of the company for the upcoming quarter had a bad effect on the shares.
Shares of Nvidia tumbled more than 7 percent Wednesday. In fact, due to the decline in its shares, the market capitalization of the company also nose-dived.
The company said that the revenue of the company grew 122 percent during the quarter. It had grown to $30 billion in the quarter ended July 28, 2024. For the revenue of the company, analysts estimated $28.9 billion.
Nvidia forecasted that the revenue of the company would reach $32.5 in the current quarter. This estimate is also higher than analysts' estimates.
The company's revenues from AI processors also rose during this quarter, with the company seeing a 154 percent increase in the sale of processors compared to the same period last year. Its gross margin also declined to 75.1% from 78.4%.
Gross margin is forecasted to reach the mid-70s for the full business year. For the same period, analyst estimates stood at 76.4% for gross margin.
Nvidia shares recorded a sell-off in Wednesday's trading session. The company obviously disappointed the market with its conservative outlook. Its shares were down 2% in early trade, while after a few hours, shares fell up to 8.5%. Nvidia has cleared the purchase of an additional share of $50 billion along with its own purchased shares.
Currently, Microsoft, Alphabet, Meta, and Tesla are some of the big customers of Nvidia. This company uses H100 and H200 chips for most generative AI like ChatGPT. But now Blackwell's chips drew everyone's attention. Blackwell chips may be provided to the customers very soon by Nvidia. This chip is the next-generation AI chip. The management of the company has assured that the customer will get the chip by next quarter.
