The world's most valuable company beat forecasts as revenues jumped 85%. Yet rising competition and efforts to diversify beyond big tech left investors cautious, sending shares lower in late trading.
Artificial intelligence chipmaker Nvidia's quarterly results once again beat Wall Street expectations, driven by strong demand for its high-end AI chips.
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The company said on Wednesday it reported a net income of $58.32bn (€53.7bn) or $2.39 per share in the February-April period, up from $18.78bn (€17.3bn) or 76 cents per share in the same period a year earlier. Excluding one-time items, Nvidia earned $1.87 per share.
Revenue rose 85% to $81.62 bn (€75.1bn) from $44.01 bn (€40.5bn).
Analysts, on average, were expecting earnings of $1.75 per share and revenue of $78.91 bn (€72.6bn), according to a poll by FactSet. Nvidia's results have exceeded analyst projections since its high-end chips emerged as key components of AI systems three years ago.
“The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed,” CEO Jensen Huang said in a statement.
Alongside higher profit and revenue, however, Nvidia's operating expenses rose 49% to $7.75bn (€7.1bn).
The company is also looking to diversify its customer base, aiming to rely less on large data centre operators as governments and other industries become a bigger source of demand for AI chips, Bloomberg reported.
It comes as competition intensifies and major customers develop in-house alternatives.
For the current quarter, Nvidia forecast revenue of about $91bn (€83.7bn), while analysts are expecting $87.29bn (€80.3bn).
Despite the solid results and outlook, many investors remain cautious about a potential slowdown after a three-year boom that has seen Nvidia’s market value surge from $400 bn (€368bn) at the end of 2022 to $5.4 trn (€5tr) as of Wednesday.
Shares of the Santa Clara, California-based company fell slightly in after-hours trading to $222.12 after closing at $223.47 in the regular session.
“Time and time again, (Nvidia) obliterates expectations and consensus; it delivered exactly on what people wanted, especially regarding data centres,” said David Wagner, head of equity and portfolio manager at Aptus Capital Advisors.
“But the market doesn’t always act as you would expect after a strong report like this one.”
The company also announced plans to return money to shareholders, authorising a $80bn (€73.6bn) share buyback programme and increasing its quarterly dividend to 25 cents per share from 1 cent.
