Nvidia CEO Jensen Huang arrives at the launch of the supercomputer Gefion, at the Vilhelm Lauritzen Terminal in Kastrup, Denmark, Oct. 23, 2024.
Ritzau Scanpix | Mads Claus Rasmussen | Via Reuters
Nvidia reported third-quarter earnings that beat expectations for sales and earnings, while delivering a better-than-expected forecast for the current quarter. The results show that Nvidia is continuing to grow quickly while demand for its powerful AI chips remains high.
Shares fell 2% in extended trading.
Here are the results.
- Revenue: $35.08 billion vs. $33.16 billion expected by LSEG
- Earnings per share: 81 cents adjusted vs. 75 cents adjusted expected by LSEG
Nvidia said it expects about $37.5 billion plus or minus 2% in current quarter sales, versus $37.08 billion expected by analysts polled by LSEG.
The fourth-quarter forecast implies year-to-year growth of about 70% from a year earlier, a slowdown from 265% annual growth in the same period a year prior.
Revenue continues to surge at Nvidia, rising 94% on an annual basis during the quarter ended Oct. 27. That's still a consecutive slowdown from the previous three quarters, when sales rose 122%, 262%, and 265%, respectively.
Nvidia has been the primary beneficiary of the ongoing artificial intelligence boom. Shares have nearly tripled so far in 2024, making it the most valuable publicly-traded company.
That's been driven by Nvidia's data center business, which records sales from AI processors and related parts, and now makes up the vast majority of Nvidia's revenue. Nvidia posted $30.8 billion in its data center division, rising 112% from a year ago, while analysts polled by StreetAccount were expecting $28.82 billion in revenue.
Not all of Nvidia's data center sales are chips. About $3.1 billion of it was due to sales of networking parts, the company said.
Net income during the quarter rose to $19.3 billion, or 78 cents per share, versus $9.24 billion, or 67 cents per share in the year-ago period. Nvidia's gross margin rose to 73.5%, slightly higher than analyst estimates, and the company says the increase was because it is selling more data center chips.
Many of Nvidia's end-customers, such as Microsoft, Oracle, and OpenAI, have started receiving the company's next-generation AI chip called Blackwell. Nvidia CEO Jensen Huang said in a statement that Blackwell is in "full production."
Shipments of Nvidia's Blackwell chips are scheduled to begin in the current quarter and will ramp up next year, CFO Colette Kress said in a statement. The company also said that its current-generation AI chip, the H200, "grew significantly in the quarter."
"Both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026," Kress said.
Nvidia's gaming business reported $3.28 billion in revenue, versus StreetAccount expectations of $3.03 billion. Nvidia's graphics processing units were first developed for 3D gaming before the technology was repurposed for artificial intelligence. Nvidia said the rise in sales was because of increased demand for GPUs for PCs and laptops, as well as an increase in game console chip revenue. Nvidia makes the chip at the heart of Nintendo's Switch.
The company's automotive and professional visualization businesses are much smaller than its data center and gaming segments. Automotive sales came in at $449 million, up 72% on an annual basis, which Nvidia said was due to self-driving car chips. The segment also includes chips that Nvidia sells for robots. The professional visualization segment accounted for $486 million in sales, up 17% year-over-year.
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