Nvidia's financial results are in, and the reaction from investors is mixed. The company's earnings per share came in at $0.89, beating analysts' expectations of $0.84.
The strong earnings beat was driven by a 21% increase in revenue from the company's gaming segment. This is a significant boost for the company, which has been struggling to keep up with demand for its graphics cards.
Investors are also looking to the company's outlook for guidance on future growth. Nvidia has forecasted a revenue increase of 10% for the next quarter, which is in line with analyst expectations.
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Nvidia Earnings Reaction
Nvidia's earnings report was a make-or-break moment for the broader market, with its stock price swinging higher and then lower and then higher again in the minutes right after the report came out.
Nvidia's stock price was up about 2% from where it closed Wednesday afternoon, as of about 5 p.m. ET.
The company's financial results for the quarter ended in January topped analysts' expectations, with $39.3 billion in revenue, up a hefty 78% for the quarter.
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Dan Ives, a managing director and senior equity research analyst at Wedbush Securities, described Nvidia's earnings as "flawless" and "should be framed and hung in the Louvre".
Nvidia's forward-looking statements signaled slowing profit-margin growth, which may have contributed to the company's shares being down 5% heading into its earnings report.
Nvidia's stock climbed some 880% between the start of 2023 and the end of 2024, making it the most valuable publicly traded U.S. firm at the time.
The company's market capitalization is now over $3 trillion, making it the second-most-important component of the S&P 500 index, behind only Apple.
Many investors and analysts are closely watching Nvidia's financials as a barometer for the economy at large, given its central role in the global AI arms race.
Analysts' Verdict
Analysts across the Street were quick to praise Nvidia's latest earnings report, with Wedbush's Dan Ives calling the results "flawless" and "should be framed and hung in the Louvre".
Nvidia's financial results for the quarter ended Oct. 27 topped expectations across the board, with analysts at JPMorgan, DA Davidson, and Bernstein each raising their price targets on the stock.
Analyst Gil Luria of DA Davidson raised his price target on Nvidia to $135 from $90, despite maintaining a Neutral rating, citing the company's ability to deliver even with production setbacks.
Analysts at JPMorgan and Truist Securities maintained a Buy rating on Nvidia stock, with JPMorgan's Harlan Sur raising his price target to $170 from $155, and William Stein of Truist Securities writing that NVDA remains "the AI company owing to its culture of innovation".
Wedbush's Dan Ives believes the path to a $4 trillion market cap and beyond is now laid out by Nvidia, and is bullish for the broader tech rally into year-end and 2025.
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Financial Outlook
Nvidia is projecting a record-high third-quarter revenue of $54 billion, with a possible range of $52.8 billion to $55.2 billion.
The company's CFO, Collette Kress, mentioned that the revenue-sharing agreement with the Trump administration could lead to resumed sales of Nvidia's H20 chips in China, which could represent a $50 billion opportunity for Nvidia this year.
Nvidia's CEO, Jensen Huang, estimates that China's market could be a significant opportunity for the company, and he also sees a "real possibility" of being granted a license to sell its Blackwell chips in China.
Nvidia's projected third-quarter revenue is higher than what Wall Street analysts had forecasted, with a target of $53.8 billion.
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