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This article will take you to survey NVIDIA shares, covering details of the company’s performance, growth factors, analysts’ concerns, and plans.
In the second quarter of 2024, NVIDIA reported strong results, totaling revenue was 30,040 million U.S. dollars, up by 122% from the previous year and 15% from the previous quarter. The net income was 16.6 billion U.S. dollars, or 67 cents per share, up by 168% compared with the previous year’s net income of only 6,180 million U.S. dollars, or 25 cents a share.
NVIDIA’s growth was driven by growing demand for data center chips, particularly AI processors, which saw revenue increase 154% from last year at 26.3 billion U.S. dollars, or about 88% of total sales, which exceeded analysts’ expectations of 25.240 million U.S. dollars.
Another key contributor to NVIDIA’s rapid growth is the expansion of artificial intelligence (AI) technology, in which NVIDIA’s AI processor chips have enjoyed strong market popularity. Since the beginning of this year, NVIDIA’s stake has increased more than 150%, after nearly 240% in 2023, bringing its market value to more than 3 trillion U.S. dollars.
Despite good performance, NVIDIA shares fell 7% after the announcement of operating results due to concerns about future growth. NVIDIA expects revenue in the third quarter to be around 32.5 billion U.S. dollars, higher than the analyst’s average of 33 billion U.S. dollars – 34 billion U.S. dollars.
There are also rumors of delays in the production of the new AI chip called Blackwell, which may affect investor confidence.
NVIDIA has announced plans to buy back 50,000 million U.S. dollars in shares and additional dividends to return benefits to shareholders. The company expects to start production in the fourth quarter of 2024 with high expectations of Blackwell chips, now shipping samples and streamlining its manufacturing process.
NVIDIA’s business covers a wide range of fields, including support for cloud providers and Internet companies such as Microsoft, Alphabet, Meta, and Tesla. NVIDIA’s chips such as the H100 and H200 are used in Generative AI applications such as OpenAI’s ChatGPT.
NVIDIA’s gaming business, formerly its core business, grew 16% from last year to approximately 2.9 billion U.S. dollars, partly due to increased shipments of PC gaming cards and Nintendo game console chips.
In addition, NVIDIA’s high-end graphics business grew by 20% and its automotive and robotics business increased by 37%. The company also approved an additional 50 billion U.S. dollar stock buyback.
NVIDIA’s second-quarter results show stronger-than-expected growth, especially in data center and AI chip revenues. However, the share price fell after the announcement of the operating results due to concerns about future growth and delays in the production of next-generation chips. NVIDIA is optimistic about future growth and plans to return benefits to shareholders through stock repurchases and dividends.
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