AI chip designer reports record sales

Top line

Nvidia continued to beat Wall Street expectations in its latest quarterly report released Wednesday, setting several earnings records while reporting significant year-over-year increases in revenue and net income.

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What you should pay attention to

According to The Information, Blackwell, Nvidia's highly anticipated AI superchip, has reportedly experienced production delays, although two of Nvidia's suppliers have indicated that a version of the chip could ship in the fourth quarter. Delays are not expected to impact Nvidia's fiscal third quarter, but delays could put pressure on the company's stock price “given ongoing market uncertainty around interest rates/geopolitics,” according to Bank of America Securities.

tangent

Nvidia's once core gaming division posted a small increase in the second quarter, with revenue of $2.9 billion. However, the division continues to report revenue below its record $3.06 billion in the second quarter of 2021 as Nvidia increasingly focuses on its AI offerings.

Important background

Nvidia develops the lion's share of semiconductor chips used in AI technology, allowing it to secure tech giants such as Microsoft, Amazon, Meta, Alphabet and Meta as its biggest customers. Nvidia's consistent and record-high earnings gains have contributed to the company's impressive stock performance since the beginning of the year, when it traded at $48.17 per share. The technology company has cemented its place as the best stock of 2024 in the S&P 500, rising more than 150% year to date and 500% over the past three years.

More information

Nvidia earnings: Share price rises after AI giant reports 600% profit explosion and 1:10 stock split (Forbes)

How Nvidia Stock Could Rise 2.5x to $300 (Forbes)