Nvidia (NVDA) has announced third-quarter results that beat sales and profit expectations, accompanied by an upbeat outlook for the current quarter. This reflects the company's ability to expand while demand for its powerful artificial intelligence (AI) chips remains high.
Nvidia shares fell 2% in after-hours trading.
Quarterly Results
Revenue: $35.08 billion vs. $33.16 billion expected (LSEG).
Earnings per share: $0.81 adjusted vs. $0.75 adjusted expected (LSEG).
Nvidia projects revenue for the next quarter of approximately $37.5 billion plus or minus 2%, beating the $37.08 billion estimated by analysts.
Nvidia's Sustained Growth
Nvidia's revenue continues to soar, up 94% year over year in the quarter ended October 27. However, this represents a back-to-back slowdown compared to the previous three quarters, where sales grew 122%, 262% and 265%, respectively.
Net income for the quarter reached $19.3 billion, or $0.78 per share, up from $9.24 billion, or $0.67 per share, in the same period a year ago. Gross margin rose to 73.5%, slightly above analysts' estimates, driven by a surge in sales of data center chips.
Data center business leads the way
Nvidia has been the main beneficiary of the rise of artificial intelligence in 2024. Its shares have nearly tripled, making it the most valuable publicly traded company.
The data center business, which generates revenue from AI processors and related components, now accounts for the majority of Nvidia's revenue. During the quarter, Nvidia reported $30.8 billion in this division, beating the $28.82 billion expected by analysts.
New Developments in AI Hardware
Many Nvidia customers, such as Microsoft (MSFT), Oracle, and OpenAI, have already begun receiving its next-generation chip called Blackwell. According to CFO Colette Kress, production shipments of Blackwell will begin in the current quarter and ramp up next year.
In addition, Nvidia’s H200 chip, part of its current generation of AI, saw significant growth in the quarter.
“Both Hopper and Blackwell systems face certain supply constraints, with demand for Blackwell expected to outstrip supply for several quarters in fiscal 2026,” Kress said.
Nvidia’s gaming business reported $3.28 billion in revenue, beating StreetAccount expectations of $3.03 billion. Nvidia’s GPUs, originally developed for 3D gaming, have found innovative use in AI applications, driving their relevance across multiple sectors.
