Despite surpassing anticipations, Nvidia's shares continue to decline invalue.
Experts had anticipated a quarterly revenue of $28.8 billion. As Matt Britzman, an analyst from Hargreaves Lansdown, put it, "Nvidia keeps bucking trends." Remarkably, Nvidia's earnings skyrocketed to $16.5 billion, a staggering 168% increase from the year prior.
However, the investors' response suggested that this wasn't enough to please the market, Britzman observed. "It's not just about exceeding predictions now, it's about shattering them. And today's results seemed to leave investors a tad underwhelmed." There's a growing concern that Nvidia's growth, driven by the surge in machine learning (ML), might be indicating a shift towards normalcy.
Previously, Nvidia was largely recognized as a supplier of graphics card chips for gaming PCs by the general public. However, its advanced semiconductors have a wide range of uses in novel ML applications that require substantial computational power. Major players like Microsoft, Google, Meta, Tesla, and Amazon currently utilize Nvidia's tech for their ML models.
Nvidia's meteoric rise on the stock market was momentarily halted in July when there were questions about the imminent profits from generative ML. However, the stock price has since bounced back and nearly touched the peak values from a few months ago, when the company momentarily became the most valued company worldwide by market cap.
In the future, the company continues to predict revenue growth that most organizations can only aspire to. For the upcoming quarter, it aims for $32.5 billion in revenue, which yet again surpasses analysts' predictions (31.7 billion dollars).
The demand for Nvidia's semiconductors, particularly the Hopper, is impressive. The Hopper is a line of microprocessors, including the H100, Nvidia's leading product, which is incredibly popular and costs tens of thousands of dollars per unit.
Despite exceeding analysts' predictions by a significant margin, investors expressed disappointment with Nvidia's earnings, suggesting a need for results that not only meet but also surpass expectations continuously. This perceived underperformance might stem from the market's increased expectations due to Nvidia's consistent success in the field of other emerging technologies, such as machine learning.
