Californian tech giant Nvidia has reported astonishing revenue growth in Q3 as AI-inspired demand lifted sales. But it was not enough to lift shares, which fell on concerns about China demand tapering off.
In Q3, the tech company saw a record revenue of $18.12 billion. The revenue is up 34% from Q2. What’s more, it marks a 206% rise from a year ago.
Nvidia’s shares were slightly down (around 0.7%) in the premarket on Wednesday morning.
Jensen Huang, founder and CEO of NVIDIA, said that “our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI”.
He added that “large language model startups, consumer internet companies, and global cloud service providers were the first movers, and the next waves are starting to build. Nations and regional CSPs are investing in AI clouds to serve local demand; enterprise software companies are adding AI copilots and assistants to their platforms; and enterprises are creating custom AI to automate the world’s largest industries.”
Q3 Data Centre revenue also reached a historic high of $14.51 billion, marking 41% growth from Q2.
The data centre growth from the same time last year adds up to, once again, a record-breaking 279%.
According to Derren Nathan, head of equity research at Hargreaves Lansdown, “the growth in its market value since Chat GPT first arrived on the scene has been astonishing. The share price has trebled, and the company is now one of a handful worth over a trillion dollars. But the investment returns have very much been powered by even more impressive growth in the underlying business.”
The company further states that the expected revenue for the year 2024 is $20.00 billion (+/- 2%).
However, Russ Mould from AJ Bell warns that these successes might put too much pressure on the company: “The downside of being a superstar company is having to continuously smash expectations.”
He added that “US chipmaker Nvidia certainly beat market forecasts for its third quarter apart from a small miss on free cash flow. However, investors want nothing short of remarkable each time the company reports, and there wasn’t enough pzazz in the announcement to drive its shares higher, at least for now as the long-term outlook is still bullish from the company’s perspective.”