Nvidia’s AI Momentum Powers Record Revenue, But Shares Slip
Despite beating revised upward expectations, Nvidia's latest earnings report didn't deliver the jaw-dropping surprise that investors had hoped for, resulting in a 6% drop in after-hours trading. However, market reactions can be fickle, and investors are best served by focusing on fundamentals rather than immediate stock movements.
Nvidia remains a dominant force in the tech industry, reporting a remarkable $30 billion in revenue for its fiscal second quarter—a 122% year-over-year increase. This surge is driven by unstoppable demand for its GPUs, especially in data centres where AI development is booming.
The company's data centre revenue soared to $26.3 billion, up 154% from the previous year. This growth highlights the strong performance of Nvidia's current Hopper GPUs, which continue to sell well even with the next-generation Blackwell chips on the way. Nvidia expects to generate “several billions” in revenue from Blackwell in the upcoming fiscal fourth quarter, while still anticipating rising demand for Hopper GPUs.
Despite the market's lukewarm reaction to the earnings report, Nvidia’s strong fundamentals and leadership in the rapidly expanding AI and data centre markets will drive long-term returns.
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