NVIDIA's Record-Breaking Quarter and Future Growth Prospects

Nvidia Shatters Revenue Records With A Staggering $30 Billion Quarter Yet Sees Stock Prices Slide - Setting The Stage For A Game-Changing Chip Release - NVIDIA (NASDAQ:NVDA)

Nvidia reported a striking 122% increase in revenues, reaching $30 billion for the second quarter. Nvidia's CFO, Colette Kress, revealed plans for the upcoming launch of the Blackwell chip in the fourth quarter. Despite the high demands of its work environment, Nvidia maintains a low employee turnover rate. NVIDIA Corp NVDA has made headlines with its outstanding financial results for the second quarter, reporting revenues of $30 billion, a remarkable 122% increase from the same period last year. This figure not only surpasses the company's previous records but also exceeds Wall Street's expectations of $28.9 billion. The bulk of this revenue growth comes from strong sales of Nvidia's Hopper GPU, which have significantly boosted the company's profitability. As a result, Nvidia reported a gross profit margin of 75.1% and adjusted earnings per share of $0.68, beating the expected $0.64. However, despite these strong financial results, Nvidia's stock dropped by 6% in after-hours trading. This decline likely reflects the market's high expectations before the earnings release rather than any issues with the company's performance. Adding to investor interest, Nvidia's CFO, Colette Kress, announced plans to launch the much-anticipated Blackwell chip in the fourth quarter. The company expects this next-generation chip to bring in several billion dollars in additional revenue, highlighting Nvidia's leadership in the AI chip market. With a dominant 90% market share, Nvidia continues to lead the tech industry's move towards advanced AI infrastructure. Despite a demanding work environment with late nights and weekend shifts, Nvidia has a low employee turnover rate compared to the broader semiconductor industry. This is largely due to the significant financial benefits of stock ownership. Since 2019, Nvidia's stock has increased by over 3,000%, turning many employees into millionaires and discouraging them from leaving before their stock grants fully vest. CEO Jensen Huang has openly stated that achieving exceptional results at Nvidia is challenging, reflecting the company's high-performance culture. On the technical side, Nvidia's stock shows potential to bounce back despite recent drops. The $100 level could act as a psychological support point, having previously helped the stock recover in early August. Additionally, the daily 200 simple moving average around $90 adds another solid support layer, indicating limited downside for the stock. While Nvidia's stock is currently having trouble breaking past the June high of $140, the strong support levels below should prevent major declines and might spark a return of the bullish momentum. After the closing bell on Wednesday, August 28, the stock closed at $236.17, trading down by 2.0%. This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy. Market News and Data brought to you by Benzinga APIs

Nvidia's Blackwell Chip Potential Signals Strong Future Growth: Analysts - NVIDIA (NASDAQ:NVDA)

Analysts remain optimistic despite hurdles, with Nvidia forecasting strong fourth-quarter shipments and maintaining positive growth outlooks Nvidia Corp's NVDA push to maintain its lead in artificial intelligence chips involves a new line of larger, more complex processors called Blackwell, according to analysts. These chips are nearly double the size of their predecessors, packing 2.6 times more transistors, the Wall Street Journal reports. However, this ambitious leap has led to significant manufacturing challenges, WSJ noted, impacting Nvidia's profit margins and contributing to a $908 million provision. During its recent earnings call, the company acknowledged these hurdles, announcing design adjustments to improve production yields. A significant flaw can make a $40,000 Blackwell chip unusable, severely impacting manufacturing yields. G. Dan Hutcheson, vice chair of TechInsights, told WSJ that the main challenge is getting these chips to function cohesively, as low yields in individual parts can lead to quick overall failure. Lisa Su, CEO of Advanced Micro Devices Inc AMD, told WSJ that future complexity will rise as chipmakers stack more silicon layers for increased performance. Analysts rerated Nvidia after its upbeat second-quarter print. Wedbush analyst Matt Bryson reiterated an Outperform on Nvidia with a price target of $138. Nvidia reported $30 billion in second-quarter sales driven by data center sales, which is in line with Bryson's revised estimate, while management guided for $32.5 billion in revenues in the third quarter, which was just above his outlook. Regarding Blackwell delays, management described a change to the Blackwell mask to improve yields, the analyst flagged. Bryson noted that Nvidia expects shipments to ramp up in the fourth quarter, eying revenue worth several billion dollars for Blackwell this year. Gross margins will likely be in the mid-70s for fiscal 2025. He added that Hopper revenues will likely grow in the second half of fiscal 2025, as Nvidia indicated. While the stock dropped meaningfully after hours, Bryson did not note anything in numbers or in Nvidia's commentary that was concerning or suggested any slowing in momentum fundamentally. Bryson calculated his price target by applying a price-to-earnings multiple of ~36x to his fiscal 2026 EPS estimate of $3.78 plus net cash of $1.01 per share. Bryson projects third-quarter revenue and EPS of $32.50 billion and 73 cents. Rosenblatt analyst Hans Mosesmann maintained a Buy rating with a price target of $200. Mosesmann noted that Nvidia reported a solid beat and raise on Hopper's generative AI and networking momentum, offset by slightly lower gross margins in the outlook due to Blackwell's start-up ramp for the January quarter. Blackwell is undergoing a mask update to improve yields, but interestingly, the analyst said there will be no change to the January quarter revenue ramp going through the next fiscal. Mosesmann argued that the company's GPU roadmap is driven by accelerated computing, which has a significant ROI compared to general-purpose computing, and generative AI, which is still in its early stages of deployment. Given Blackwell's roadmap for the 2026 calendar year, the analyst remains bullish on the stock. Mosesmann noted unconstrained fiscal 2027 EPS of $4.50 and applied a ~44x PE multiple, which drives his price target within Nvidia's historical 37x-69x forward PE range, backed by more robust Data Center demand dynamics. Mosesmann projects third-quarter revenue and EPS of $32.50 billion and $0.73. Price Action: NVDA stock traded up 0.14% at $117.84 at the last check on Friday. Photo via Shutterstock Market News and Data brought to you by Benzinga APIs