NVIDIA's Record Q3 Earnings Propelled by AI Hardware Sales

By: Isha Das

Record Performance

Technology company NVIDIA reported a record Q3 revenue of $18.12 billion, topping the estimated $16.18 billion. The firm's earnings per share (EPS) also outperformed expectations, reaching $4.02 on an adjusted basis as opposed to the forecasted $3.37. The news sent NVIDIA's stock trading upwards at $506 per share in pre-market trading; a 1.3% increase with the company's total market capitalization now standing at approximately $1.2 trillion.

Generative AI Drives Growth

NVIDIA's growth has been primarily fuelled by sales in AI hardware. The earnings showed a 34% increase over the last quarter and a 206% rise compared to Q3 2022. NVIDIA's CEO, Jensen Huang, attributes this growth to the transition from general-purpose to accelerated computing and generative AI. This has set the company to be a strongly sought-after investment, with its shares escalating over 248% year-to-date.

Significance of the Chinese Market

Contributing 20-25% of NVIDIA's data center revenue, the Chinese market plays a critical role in the firm's business. Notably, this implies that as much as $3.6 billion of Q3 earnings may be attributed to Chinese sales. Yet, despite expectations for a 'significant' Q4 decline in Chinese business owing to the US's partial ban on chip exports, confidence remains that strong growth in other regions will 'more than offset' the losses.

Looking Forward

NVIDIA expects a robust global chip market and anticipates further trends in AI startups, consumer internet firms and cloud service providers to keep fuelling its growth.