Its shares fall despite revenue more than doubling to US$30 billion in the second quarter.
Nvidia's outlook threatens to tamp down an AI frenzy that has transformed the chipmaker into the world's second-most valuable company.- Nvidia, the chipmaker at the heart of the artificial intelligence boom, gave a revenue forecast that fell short of some of the most optimistic estimates, stoking concern that its explosive growth is waning.
Nvidia shares fell about 5 per cent in extended trading after the report was released. They had more than doubled this year through Aug 28’s close, following a gain of 239 per cent in 2023. Nvidia is coming off a string of quarters that shattered Wall Street expectations - even as analysts continued to raise estimates. But the amount of upside has been trending down.
Expectations were lofty. Nvidia has been the best performing stock in the S&P 500 Index this year, eclipsing gains by all other semiconductor companies. At a market value of more than US$3 trillion, Nvidia is worth roughly the same amount as the next 10 largest chip firms combined. Last quarter’s topped Wall Street projections, and Nvidia’s board approved an additional US$50 billion in stock buybacks.
Nvidia’s data-centre division - now by far its largest source of sales - generated US$26.3 billion of revenue last quarter. Gaming chips provided US$2.9 billion. Analysts had given targets of US$25.1 billion for the data-centre unit and US$2.79 billion for gaming.
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