American chip manufacturer Nvidia’s net profit rose by 168 percent to $16.6 billion (373.7 billion crowns) in the second quarter, and sales were a record. The company thrives on its dominant position in artificial intelligence (AI) chips. It follows from declaration companies. However, the company’s outlook for the third quarter did not meet the high expectations of analysts, and the company’s shares fell after the official closing of the American stock exchange.
Earnings per share were 68 cents, while analysts expected earnings of just 64 cents per share. Revenues increased 122 percent year-over-year to $30.04 billion. Compared to the previous quarter, they rose by 15 percent. Analysts had expected sales of $28.7 billion. The data center division’s revenue rose 154 percent to a record $26.3 billion, also beating analysts’ forecasts of $25.15 billion.
However, the market expected more from the company as it has significantly outperformed even the most aggressive expectations over the past few quarters. This time, however, it forecast a third-quarter gross margin that could miss market estimates and revenue that was broadly in line with estimates, unimpressed by investors who have seen the company’s stock skyrocket recently as they bet on the future of AI , and shares fell as much as six percent, Reuters reported. The mild forecast was also overshadowed by the fact that profit and sales for the second quarter exceeded expectations and the company announced a share buyback.
“The problem here is that the amount of the outage this time was much smaller than we’ve seen,” said Carson Group strategist Ryan Detrick. “Even the outlook for the future has been raised, but again not by as much as in previous quarters. It’s a great company that’s still growing revenue by 122 percent, but the bar seems to have been set too high this earnings season.”
In the third quarter, the company expects an adjusted gross margin of 75 percent, plus or minus half a percentage point. Analysts on average forecast a gross margin of 75.5 percent, according to LSEG. This quarter, the company expects revenue to grow to $32.5 billion. Analysts expect sales of $32 billion.
“The chip manufacturer Nvidia is currently the most important company in the world, and the publication of its quarterly results was the focus of the entire investment world,” Port analyst Marek Malina said. He pointed out that Nvidia’s shares have already gained 158 percent this year and up to 2,871 percent in five years, as the company has become a symbol of the AI boom.
The company’s technologies were originally developed for graphics cards, but then turned out to be ideally suited for computing work associated with teaching AI applications, and became an important technology for the future of AI. The company also produces chips for the gaming industry and automobiles. It also benefits from related software and service business.
