Nvidia beat expectations – as expected?
Nvidia’s headquarters in Silicon Valley.
Andrej Sokolow | Picture Alliance | Getty Images
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What you need to know today
Nvidia: Great is not good enough
Nvidia’s numbers continue to dazzle. The chipmaker beat earnings per share and revenue expectations: net income, at $16.6 billion, more than doubled compared with a year ago, while revenue surged 122%. Alongside its earnings, Nvidia also announced a $50 billion stock buyback. Still, its shares fell around 7% in extended trading.
Choppy stocks
Major US indexes fell Wednesday, dragged down by Nvidia as investors were on edge ahead of its earnings. Super Micro Computer was also a big drag, with its shares plunging 19% after the company said it’d not file its annual report on time, and Hindenburg Research disclosed a short position on it. On the other hand, European markets mostly closed higher.
The ride’s not over
Stocks took investors on a bumpy ride this August. Spooked by worse-than-expected U.S. economic data, seeing a sharp sell-off at the start of the month. Even though the S&P 500 has recovered its losses, Goldman Sach’s Christian Mueller-Glissmann sees it as a cause for concern. People aren’t interested in the thrill of a roller-coaster ride anymore.
Big non-tech
Berkshire Hathaway, Warren Buffett’s conglomerate, hit $1 trillion in market capitalization on Wednesday. It’s the first U.S. non-technology company to reach that milestone. Berkshire has climbed more than 28% this year, far outpacing the S&P 500’s 18% rise. This might be the best birthday present for Buffett, who turns 94 on Friday.
[PRO] Nvidia’s market hold
What moves markets? In recent years, thanks to inflation, the US consumer price index; the personal consumption expenditures price index; the nonfarm payrolls report. And now, thanks to the artificial intelligence explosion, Nvidia’s earnings reports. Here’s how the S&P, over the past year, has shifted after Nvidia reports earnings.
The bottom line
Is it fair to say Nvidia beat expectations, if the chipmaker’s performance over the past year has driven retail investors to always expect that the company will exceed expectations?
For its recently concluded quarter, Nvidia earned $30.04 billion in revenue, higher than the $28.7 billion expected. Even better, it said it anticipates around $32.5 billion in revenue for the current quarter, outstripping the $31.7 billion estimated by analysts.
That boost is because the company expects “to ship several billion dollars in Blackwell revenue,” said Nvidia Chief Financial Officer Colette Kress. Blackwell is Nvidia’s next-generation artificial intelligence chip.
It’s all good news, right? Why, then, did Nvidia stock fall more than 7% in extended trade?
There was one black cloud: Nvidia’s gross margin in the current quarter…
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