Nvidia posted stronger-than-expected third-quarter earnings Wednesday, powered by ongoing demand for its legacy AI chips and new line of Blackwell processors. However, it issued a muted near-term revenue forecast that sent shares lower in after-hours trading.
Nvidia (NVDA) said adjusted profit for the three months ending in October came in at 81 cents a share, more than double the tally from the same period last and firmly ahead of the Wall Street consensus forecast of 75 cents a share.
Hopper drives solid Q3 revenues
Group revenue soared 94% from a year earlier to $35.08 billion, a figure that also topped analysts' consensus estimate of $31.3 billion.
Data center revenue, which includes the group's main AI effort, rose 112% from a year earlier to a record $30.8 billion. Gross profit margins were pegged at 75%, essentially flat to last year's levels.
Looking into the current quarter, Nvidia sees revenue in the region of $37.5 billion, with a 2% margin for error, just modestly ahead of the LSEG consensus forecast of $37.1 billion.
Finance chief Colette Kress said Blackwell shipments are scheduled to begin in the current quarter, but warned that supply constraints will likely linger well into coming year.
"We will be shipping both Hopper and Blackwell systems in the fourth quarter of fiscal 2025 and beyond," Kress said in her commentary letter released alongside the earnings report. "Both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026."
Nvidia CEO highlights robust AI demand tailwinds
“The age of AI is in full steam, propelling a global shift to NVIDIA computing,” said CEO Jensen Huang. “Demand for Hopper and anticipation for Blackwell — in full production — are incredible as foundation model makers scale pretraining, post-training and inference.
Related: Nvidia may see huge stock price swing after earnings
“AI is transforming every industry, company and country. Enterprises are adopting agentic AI to revolutionize workflows," Huang added. "Industrial robotics investments are surging with breakthroughs in physical AI. And countries have awakened to the importance of developing their national AI and infrastructure."
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Nvidia shares were marked 1.7% lower in after hours trading immediately following the earnings release to indicate a Thursday opening bell price of $143.35 each.
The key for how $NVDA will trade tomorrow is to better understand the CFO's comment that "both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026."
— Gene Munster (@munster_gene) November 20, 2024
The positive read is…
Options traders are bracing for big swings in Nvidia's stock price and see moves of around 9% in either direction in the wake of its third quarter update.
With a market value of $3.5 trillion, that could mean lost or added value of around $310 billion in after-hours trading alone and significantly impact all three major benchmarks, each of which houses Nvidia stock, when trading starts up again on Thursday.
Related: Veteran fund manager sees world of pain coming for stocks
