Nvidia American AI chip major Nvidia shares slip despite record sales
California/IBNS: Shares in artificial intelligence (AI) chip giant Nvidia have fallen despite the American company comfortably beating expectations after more than doubling its sales, reports said.
According to reports, Nvidia announced record revenues of $30bn over a three-month period.
The California-based tech major has been one of the biggest beneficiaries of the AI boom, with its stock market value soaring to more than $3 trillion.
But while analysts have grown used to Nvidia producing "spectacular" sales growth, the latest results indicate "that rate of growth was starting to slow," BBC reported, quoting Simon French, head of research at Panmure Liberum.
Analysts had forecast sales growth of $28.7bn for the three months to 28 July, but Nvidia surpassed this with revenues increasing by 122 percent compared to the same period last year.
Still, Nvidia's share price fell by 6 percent in after-hours trading in New York.
Shares of the AI juggernaut were down about 5 percent in extended trading early Thursday (August 29) following the results, and the stock fell as much as 6 percent in immediate reaction to the numbers, reports Yahoo Finance.
According to a Nvidia press release, for the quarter, GAAP earnings per diluted share was $0.67, up 12 percent from the previous quarter and up 168 percent from a year ago, while non-GAAP earnings per diluted share was $0.68, up 11 percent from the previous quarter and up 152 percent from a year ago.
GAAP, or Generally Accepted Accounting Principles, is a collection of commonly followed accounting rules and standards for financial reporting, while GAAP specifications include definitions of concepts and principles, as well as industry-specific rules.
“Hopper demand remains strong, and the anticipation for Blackwell is incredible,” said Nvidia founder and CEO Jensen Huang.
“NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI,” Huang said.
“Blackwell samples are shipping to our partners and customers. Spectrum-X Ethernet for AI and Nvidia AI Enterprise software are two new product categories achieving significant scale, demonstrating that Nvidia is a full-stack and data center-scale platform," the Nvidia CEO added in the press release. "Across the entire stack and ecosystem, we are helping frontier model makers to consumer internet services, and now enterprises. Generative AI will revolutionize every industry.”
During the first half of fiscal 2025, Nvidia returned $15.4 billion to shareholders in the form of shares repurchased and cash dividends.
As of the end of the second quarter, the company had $7.5 billion remaining under its share repurchase authorization.
On August 26, the Board of Directors approved an additional $50.0 billion in share repurchase authorization, without expiration, according to the Nvidia press release.
The AI chip major will pay its next quarterly cash dividend of $0.01 per share on October 3 to all shareholders of record on September 12.
On June 7, Nvidia completed a ten-for-one forward stock split. All share and per-share amounts presented have been retroactively adjusted to reflect the stock split, the US-based company stated.
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