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POLAND – 2024/11/13: In this photo illustration, the NVIDIA company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)
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Nvidia shares whipsawed Thursday as investors reacted to the U.S. chipmaker’s third-quarter earnings.
Shares of the tech giant were down 2.2% as of 10:30 a.m., having initially traded higher earlier in the session. The stock had previously fallen in premarket deals.
Investors were reacting to Nvidia’s latest quarterly results, which beat on both the top and bottom lines. Revenue came in at $35.08 billion, up 94% year-on-year and exceeding the $33.16 billion forecast by LSEG analysts. Earnings per share was 81 cents adjusted, also above analyst expectations.
The broader semiconductor space got a bump from Nvidia turning higher. AMD, one of Nvidia’s closest rivals, dropped 1.8%. Qualcomm was down 0.2%. Intel rose 0.2%.
Nvidia has largely cornered the market for the high-powered chips powering the world’s most advanced artificial intelligence models, such as OpenAI’s ChatGPT.
Despite nearly doubling sales year-on-year, Nvidia’s third-quarter results showed a slowdown from previous quarters. Nvidia previously reported growth of 122% in the second quarter, 262% in the first quarter, and 265% in the fourth quarter of 2023.
William de Gale, lead portfolio manager of BlueBox Asset Management’s global technology fund, told CNBC the problem for Nvidia as a stock is that “insane” GPU demand has become the “bare minimum” expected of the company.
“There is a risk here … that Nvidia’s current overearning will begin to come to an end,” he said. “There’s considerable risk in this name at the moment. But it’s exciting,” he said.
Derren Nathan, head of equity research at Hargreaves Lansdown, said in emailed comments Wednesday that the dip in Nvidia’s share price “suggests even outstanding isn’t enough for some investors,” adding that he expects the stock to bounce back once markets open.
“NVIDIA’s generated stellar gains for shareholders over many years now, and right now it’s pretty hard to see any major holes in the investment case,” Nathan added.
Analysts are looking ahead to the much-anticipated launch of Nvidia’s next-generation chip called Blackwell. On the firm’s earnings call, CEO Jensen Huang said that demand for the chip is exceeding supply.
– CNBC’s Kif Leswing contributed to this report