Nvidia fourth-quarter revenue forecast beats estimates

Bengaluru — Nvidia forecast fourth-quarter revenue slightly above estimates on Wednesday, betting on robust sales of its coveted artificial intelligence (AI) chips, but still failed to meet lofty expectations of investors who have made it the world’s most valuable firm.

Shares of the Santa Clara, California-based company fell 2% in extended trading. They had closed down 0.8% on Wednesday.

The company forecast revenue of $37.5bn, plus or minus 2% for the fourth quarter, compared with analysts’ average estimate of $37.09bn according to data compiled by LSEG.

“The age of AI is in full steam, propelling a global shift to Nvidia computing,” CEO Jensen Huang, said in a statement. “Demand for Hopper and anticipation for Blackwell — in full production — are incredible as foundation model makers scale pretraining, post-training and inference.”

Expectations ran high ahead of the results, with Nvidia shares up more than 20% over the past two months. The stock has nearly quadrupled this year, and is up more than nine-fold over the past two years.

While demand is soaring for the company’s chips that make up the brains of complex generative AI systems, supply-chain snags have made it harder for Nvidia to report the big beats on revenue that have helped make it a Wall Street darling.

One of the bottlenecks for its chip supply has been the limited capacity for advanced manufacturing techniques at the company’s manufacturing partner Taiwan Semiconductor Manufacturing Company.

The company recorded third-quarter adjusted earnings of 81c per share, compared with estimates of 75c per share.

Reuters