AI Kingpin Nvidia Obliterates Q3 Estimates On Huge Data Center Growth

Artificial-intelligence chip leader Nvidia (NVDA) late Tuesday smashed Wall Street’s targets for its fiscal third quarter thanks to massive growth in sales of AI processors for data centers. It also guided higher than views for the current quarter. But NVDA stock fell in extended trading.




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The Santa Clara, Calif.-based company earned an adjusted $4.02 a share on sales of $18.12 billion in the quarter ended Oct. 29. Analysts polled by FactSet had expected Nvidia earnings of $3.37 a share on sales of $16.19 billion. On a year-over-year basis, Nvidia earnings rocketed 593%, while sales soared 206%.

Nvidia’s Q3 report marked its second consecutive quarter of triple-digit percentage growth in sales and earnings thanks to white-hot demand for its processors for AI applications.

In the third quarter, Nvidia’s data center sales jumped 279% from the year-earlier period to a record $14.51 billion. Data center sales increased 41% from the second quarter.

NVDA Stock Dips After Report

For the current quarter, Nvidia forecast sales of $20 billion, up 231% from the prior year. Analysts had been modeling sales of $17.96 billion for the fiscal fourth quarter ending in January.

In after-hours trading on the stock market today, NVDA stock slid 1% to 494.27. During the regular session Tuesday, NVDA stock declined 0.9% to close at 499.44.

“Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI,” Chief Executive Jensen Huang said in a news release.

“Large language model startups, consumer internet companies and global cloud service providers were the first movers, and the next waves are starting to build,” he said. “Nations and regional CSPs (cloud service providers) are investing in AI clouds to serve local demand, enterprise software companies are adding AI copilots and assistants to their platforms, and enterprises are creating custom AI to automate the world’s largest industries.”

Nvidia Is A Recent Breakout

On Nov. 9, NVDA stock broke out of a double-bottom base at a buy point of 476.09, according to IBD MarketSmith charts.

Last week, Nvidia shares rose after the company announced new data center processors optimized for AI. At the SC23 supercomputing conference in Denver, Nvidia introduced its HGX H200 AI computing platform and GH200 Grace Hopper Superchip.

Nvidia ranks first out of 37 stocks in IBD’s fabless semiconductor industry group, according to IBD Stock Checkup. NVDA stock has an IBD Composite Rating of 98 out of 99.

Further, NVDA stock is on three IBD lists: IBD 50, Leaderboard and Tech Leaders. Also, Nvidia is one of the Magnificent Seven stocks that have driven the market higher this year.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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