Microchip giant Nvidia (NVDA) has issued second-quarter financial results that beat Wall Street expectations across the board, including year-over-year revenue growth of 122%.
In addition to its latest results, which were highly anticipated by the market, Nvidia announced a new $50 billion U.S. stock buyback that is one of the largest in corporate America.
Santa Clara, California-based Nvidia reported earnings per share (EPS) of $0.68 U.S. versus $0.64 U.S. that had been the consensus estimate among analysts. The profit more than doubled from $0.25 U.S. per share a year ago.
Revenue in the quarter totaled $30.04 billion U.S., topping the $28.70 billion U.S. that had been expected across Wall Street. The company’s sales grew 122% from a year earlier.
Despite the strong results, Nvidia’s revenue growth was a deceleration following three consecutive quarters of year-over-year growth in excess of 200%.
As a result, Nvidia’s stock dipped 3% in premarket trading following the release of its Q2 results.
Still, Nvidia reported that revenue in its data centre business, which includes its artificial intelligence (A.I.) processors, increased 154% from a year earlier to $26.30 billion U.S., accounting for 88% of total sales. It also beat consensus expectations of $25.24 billion U.S.
The company stressed that not all those sales came from its in-demand A.I. chips, with $3.70 billion U.S. in revenue generated from the sale of the company’s networking products.
Revenue at Nvidia’s gaming business, which primarily consists of personal computer gaming cards and processors for video game consoles, rose 16% from a year ago to $2.90 billion U.S.
Sales of Nvidia’s chips for motor vehicles and robots rose 20% in the latest quarter to $454 million U.S., which was ahead of expectations that called for $344.7 million U.S. of revenue.
Nvidia said its gross margin declined during Q2 to 75.1% from 78.4%, although it was up from 70.1% a year ago.
Customers and analysts are awaiting Nvidia’s next generation “Blackwell” A.I. chip. Management said they shipped samples of Blackwell chips during the most recent quarter but added that current Hopper chips will make-up the bulk of its sales during the next two quarters.
In terms of guidance, Nvidia said that it expects revenue of $32.50 billion U.S. in the current third quarter versus $31.70 billion U.S. that was expected by analysts. If achieved, the Q3 sales would represent year-over-year growth of 80%.
For the full year, the company said it expects gross margins in the “mid-70% range.” Wall Street was expecting a full-year margin of 76.4%.
Prior to today (Aug. 29), Nvidia’s stock had risen 160% so far this year to trade at $125.61 U.S. per share, making it the best-performing security in the benchmark S&P 500 index.