Nvidia’s stock on Thursday, literally. The homebuilder just outpaced earnings and revenue expectations for fiscal second quarter. The big tech corporation announced adjusted earnings per share of $1.05, well ahead of the $1.01 that analysts were expecting. This impressive performance fueled a record-breaking revenue surge. The figure climbed up to $46.74 billion, which marks a 56% increase from the previous year’s third quarter.
The reported revenue aligns closely with Wall Street’s projected figure of $46.06 billion, showcasing Nvidia’s strong market presence. Nvidia’s data center revenue of $41.1 billion was the first miss on estimates in back-to-back quarters. This is even after considering the company’s business success. Regardless, the segment still showed strong growth as usual, having expanded 56% compared to last year.
There’s going to be a lot of spending on artificial intelligence infrastructure in the coming years, if Jensen Huang, the CEO of Nvidia, has his way. He estimated that spending in this field could eventually reach $3 trillion to $4 trillion. At best, that would be by the end of this decade. Huang noted the acceleration of capital expenditure in the AI industry, stating, “As the AI revolution went into full steam, as the AI race is now on, the capex spend has doubled to $600 billion per year.”
Benchmark analysts commented on Nvidia’s performance, highlighting that while the company showed “solid sequential and annual growth,” its guidance suggested “only modest upside to an elevated Street consensus.” Their estimate further reflects that Nvidia’s revenue numbers are impressive. They risk disappointing on the lofty guidance, with one analyst expecting revenues of $53.1 billion according to LSEG estimates.
Huang too underscored the remarkable room for expansion within the AI industry. He remarked, “There’s five years between now and the end of the decade, and $600 billion only represents the top four hyperscalers.” This comment underlines just how much opportunity lies ahead for Nvidia. Not just incumbents, competitors stand to benefit in the fast-paced innovating tech sector.