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Nvidia earnings are officially a crossover spectacle. Market strategists say the quarterly event for the semiconductor darling now rivals U.S. jobless report day as an indicator of overall economic health and animal instincts. As if on cue, an Nvidia earnings party was organized for Thursday afternoon at a Manhattan sports bar and promoted on social media.
The actual results probably did not disappoint the company. Overall, Nvidia’s revenue in the second quarter was 30 billion dollars, 122 percent higher than the previous year. And in the core data center division, revenue rose by 154 percent. The latter growth rate was slightly lower than the previous quarter’s 426 percent.
Nvidia founder and CEO Jensen Huang was as proponent as ever, saying the AI revolution is still in its infancy and that shipments of Nvidia’s next-generation chip, Blackwell, will increase in the coming months due to supply chain issues.
But perhaps surprisingly, Nvidia shares fell, albeit by an unremarkable 7 percent in after-hours trading. It was all, for lack of a better description, boring, even though Nvidia’s $2.9 trillion equity value is nearly three times that of Berkshire Hathaway, which joined the trillion-dollar club on Wednesday.
If investors were looking for real fireworks in AI trading, they were spotted elsewhere this week. Super Micro, a maker of AI data center equipment, delayed its $10,000 announcement. Short-seller Hindenburg Research released a report that took aim at the company’s accounting practices. Super Micro’s shares have fallen 62 percent since their March peak, representing a $40 billion market cap loss for the once-unknown company.
With revenue expected to be around $120 billion for the fiscal year, Nvidia’s enterprise value/sales ratio is still around 24 (for a hardware business that generates 75 percent gross margins). The company’s net cash position has reached $25 billion. The new share buyback authorization of a whopping $50 billion still reflects less than 2 percent of market capitalization.
In the private markets, investors are flocking to find the next Nvidia, whose chips have even more advanced processing capabilities. But for the incumbent, even if it still generates more than $10 billion in revenue per quarter, the wow factor may be wearing off, even if the underlying business doesn’t.