Nvidia’s third-quarter earnings for 2024 surpassed analysts' expectations, thanks to surging demand for its high-powered AI chips, reinforcing the company's dominance in the burgeoning AI sector. The chip giant reported earnings per share (EPS) of $0.81 on revenue of $35.1 billion, beating Wall Street’s forecast of $0.74 per share on $33.2 billion in revenue. Although the company's stock fell by 1 percent after the earnings announcement, its year-to-date performance remains striking, with shares up 192 percent, far outpacing rivals in the semiconductor space.
The company’s stellar performance was driven by its Data Center division, which generated $30.8 billion in the quarter, more than double the $14.5 billion from the same period a year ago, and comfortably ahead of analysts’ expectations of $29 billion. Gaming revenue also exceeded forecasts, reaching $3.3 billion, up from $2.8 billion a year earlier. While Nvidia’s overall quarterly performance was robust, the company’s forward guidance painted an optimistic picture, with anticipated revenue of $37.5 billion, beating Wall Street’s consensus of $37 billion.
Nvidia’s CEO, Jensen Huang, highlighted the accelerating shift towards AI, declaring that the “age of AI is in full steam” and underlining the company’s pivotal role in the global tech transformation. Huang’s optimism was backed by strong demand for Nvidia’s cutting-edge AI chips, including the Hopper and the upcoming Blackwell models, which are expected to drive significant growth in the coming quarters.
Despite concerns about potential chip supply issues, Nvidia’s CFO Colette Kress reassured investors, stating that Blackwell systems would begin shipping in the current quarter, with production ramping up into 2025. She added that while demand for Blackwell was expected to exceed supply in fiscal 2026, Nvidia was well-positioned to meet the needs of its global customer base, which includes some of the world’s largest tech companies.
Nvidia’s exceptional performance stands in stark contrast to the struggles of its rivals. Year-to-date, Nvidia’s stock has soared 192 percent, while its closest competitor, AMD, has seen its stock price drop by over 5 percent, and Intel has faced a near 52 percent plunge as it grapples with a challenging turnaround strategy.
However, the company faces potential headwinds from global geopolitical tensions. US President-elect Donald Trump has threatened to impose blanket tariffs on products from several countries, including Taiwan, where the majority of Nvidia’s chips are manufactured by TSMC. If implemented, such tariffs could increase the cost of Nvidia’s chips, putting pressure on profit margins and possibly driving up prices for consumers. This uncertainty adds a layer of risk to Nvidia’s otherwise promising outlook.
As Nvidia rides the wave of AI growth, the company’s future hinges not only on the demand for its chips but also on its ability to navigate global political and economic challenges. With its innovative product lineup and market-leading position, Nvidia’s trajectory remains strong, but the ever-changing landscape of international trade could test the company's resilience in the months ahead.
