Although Nvidia’s second-quarter profits were mostly expected, Wall Street investors were unimpressed with the chipmaker’s outlook for the upcoming quarter. Following the bell, the firm released its Q2 results. At the closing bell, Nvidia’s share price was 2.1% lower at $125.61 per share.
Nvidia Shares Decline
However, during after-hours trading, the price of Nvidia’s share dropped 6.89%. As of Wednesday’s end, its entire market value was $3.156 trillion, up to about $1.15 trillion a year earlier. The price of Nvidia’s shares has increased by 154% in 2024 and by almost 3,000% since 2019.
From the same period last year, Nvidia’s revenue more than doubled in the second quarter. Its revenue for the quarter that ended on July 31 exceeded projections of $28.70 billion, up 122% to $30.04 billion from the same period last year.
Prediction For Q3 Revenue
The company’s data center division generated 88% of its total sales revenue, growing 154% YoY to $26.3 billion. Nvidia predicted third-quarter revenue of $32.5 billion, plus or minus 2%, as opposed to the average estimate of $31.77 billion made by analysts.
With a few factors excluded, the company’s earnings per share came in at $0.68, which was somewhat more than the $0.64 projections. In the second quarter, the chipmaker revealed a gross margin of 75.7%, compared to 78.4% in the prior quarter and an average forecast of 75.8%. In Q3, it anticipates an adjusted gross margin of 75%, give or take 50 basis points.
Reason Of Decline In Stocks
Analysts claimed that the company’s gross margin and sales guidance fell short of investors’ lofty expectations, which contributed to the stock’s drop. In Q2, the gross margin was 75.1%. Even while it was higher than the same quarter last year at 70.1%, it was still lower than the Q1 figure of 78.4%. Nvidia projects a gross margin in the mid-70s for the full fiscal year, which may be less than the consensus forecast of 76.4%.
In the meantime, Nvidia has released revenue guidance for the third quarter that is both lower and above the average estimate of analysts. The company reported revenue for the third quarter of $32.5 billion, exceeding the average forecast of $31.9 billion.
