Nvidia Q2 Earnings Results: NVDA pops to $515 on significant beat on earnings, revenue

Nvidia Q2 Earnings Results: NVDA pops to $515 on significant beat on earnings, revenue
  • Nvidia powers past expectations in Q2. 
  • NVDA stock jumps from $471.15 to $515 afterhours.
  • Nvidia earnined $2.70 in adjusted EPS in Q2.
  • Revenue for Q3 guided for $16 billion.

Nvidia (NVDA) stock popped nearly 10% late Wednesday after walloping second-quarter consensus by a wide margin. The leading semiconductor designer reported adjusted earnings per share (EPS) of $2.70 – 29% higher than Wall Street expected. Likewise, revenue of $13.51 billion was 22% ahead of consensus. 

Revenue in the quarter jumped 88% from the first quarter and 101% from a year ago. This was heavily due to fierce demand for Nvidia’s H100 and A100 chips used in artificial intelligence technologies such as generative AI.

“During the quarter, major cloud service providers announced massive NVIDIA H100 AI infrastructures. Leading enterprise IT system and software providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI,” CEO and co-founder Jensen Huang said in a statement.

Data center revenue popped 171% YoY to $10.32 billion. Gaming revenue rose 22% YoY to $2.49 billion. Adjusted EPS rose 429% YoY, while GAAP EPS soared 854% YoY to $2.48. 

Nvidia stock closed up 3.17% in the regular market, closing at $471.15. Based on the closing price, NVDA stock is up 229% YTD.

For the third-quarter outlook, managment is expecting $16 billion in sales. This is well above the analyst consensus of $12.4 billion. GAAP and non-GAAP gross margins are expected to be 71.5% and 72.5%.

Nvidia repurchased 7.5 million shares during the second quarter for $3.28 billion.

NVDA 15-minute chart

Nvidia FAQs

What is Nvidia known for?

Nvidia is the leading fabless designer of graphics processing units or GPUs. These sophisticated devices allow computers to better process graphics for display interfaces by accelerating computer memory and RAM. This is especially true in the world of video games, where Nvidia graphics cards became a mainstay of the industry. Additionally, Nvidia is well-known as the creator of its CUDA API that allows developers to create software for a number of industries using its parallel computing platform. Nvidia chips are leading products in the data center, supercomputing and artificial intelligence industries. The company is also viewed as one of the inventors of the system-on-a-chip design.

What is the history of Nvidia?

Current CEO Jensen Huang founded Nvidia with Chris Malachowsky and Curtis Priem in 1993. All three founders were semiconductor engineers, who had previously worked at AMD, Sun Microsystems, IBM and Hewlett-Packard. The team set out to build more proficient GPUs than currently existed in the market and largely succeeded by late 1990s. The company was founded with $40,000 but secured $20 million in funding from Sequoia Capital venture fund early on. Nvidia went public in 1999 under the ticker NVDA. Nvidia became a leading designer of chips to the data center, PC, automotive and mobile markets through its close relationship with Taiwan Semiconductor.

What is Nvidia’s relationship to artificial intelligence?

In 2022, Nvidia released its ninth-generation data center GPU called the H100. This GPU is specifically designed with the needs of artificial intelligence applications in mind. For instance, OpenAI’s ChatGPT and GPT-4 large language models (LLMs) rely on the H100’s high efficiency in parallel processing to execute a high number of commands quickly. The chip is said to speed up networks by six times Nvidia’s previous A100 chip and is based on the new Hopper architecture. The H100 chip contains 80 billion transistors. Nvidia’s market cap reached $1 trillion in May 2023 largely on the promise of its H100 chip becoming the “picks and shovels” of the coming AI revolution.

Why does Jensen Huang have a cult following?

Long-time CEO Jense Huang has a cult following in Silicon Valley and on Wall Street due to his strict loyalty and determination to build Nvidia into one of the world’s leading companies. Nvidia neary fell apart on several occasions, but each time Huang bet everything on a new technology that turned out to be the ticket to the company’s success. Huang is seen as a visionary in Silicon Valley, and his company is at the forefront of most major breakthroughs in computer processing. Huang is known for his enthusiastic keynote addresses at annual Nvidia GTC conferences, as well as his love of black leather jackets and Denny’s, the fast food chain where the company was founded.

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