NVIDIA’s highly anticipated fiscal third quarter (August-October) performance proved the artificial intelligence (AI) boom, but the U.S.-China conflict appeared to pose a risk to future performance. Accordingly, Nvidia’s stock price fell 1% in after-hours trading.
NVIDIA, the world’s largest AI chip designer, announced after the New York Stock Exchange closed on the 21st (local time) that it recorded sales of $18.12 billion and earnings per share of $4.02 in the third quarter. Compared to the same period last year, the figures increased by 206% and 593%, respectively, and also exceeded Wall Street market forecasts (sales of $16.18 billion and earnings per share of $3.37). Sales in the fourth quarter were also expected to jump to $20 billion, significantly exceeding market expectations ($18 billion).
A significant portion of sales came from data centers. It recorded $14.51 billion, a 279% increase compared to the same period last year. As big tech companies such as Amazon Web Services (AWS) and Microsoft are investing in data centers to develop artificial intelligence (AI), sales of chips for data centers have soared.
NVIDIA dominates the global AI chip market and is considered a barometer of the AI market. This is why the stock price rose by more than 220% this year when the ChatGPT craze swept through. However, it was found that the strengthening of AI semiconductor export regulations to China due to the conflict between the US and China is posing a threat to future performance. Nvidia said that its sales in China would inevitably decline due to export controls applied to China last month.
Last month, the U.S. Department of Commerce took a direct hit from regulations, with not only Nvidia’s A100 and H100, which were subject to existing regulations, but also the relatively low-end A800 and H800 for export to China being immediately controlled, with exports worth billions of dollars being canceled.
“We expect a significant decline in sales in some regions (China) in the fourth quarter,” said Colette Kress, Nvidia’s chief financial officer. “However, we believe these declines will be offset by strong growth in other regions.” He then added in a conference call, “We are focusing on securing a U.S. government license to sell high-performance chips by working with some customers in the Middle East and China.”
NVIDIA’s stock price, which broke its all-time high the previous day, fell by about 0.9% on this day, and also fell by about 1% in after-hours trading due to concerns about the impact of a decline in exports to China after the earnings announcement.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.