Dan Ives, Global Head: Technology at Wedbush Securities, breaks down Nvidia earnings and offers his outlook for AI.
Nvidia Corp., the world’s most valuable company, gave a tepid revenue forecast for the current period, signaling that growth is decelerating after a staggering two-year boom in artificial intelligence spending.
Sales will be roughly $54 billion in the fiscal third quarter, which runs through October, the company said in a statement Wednesday. Though that was in line with the average Wall Street estimate, some analysts had projected more than $60 billion.
The outlook adds to concern that the pace of investment in AI systems is unsustainable. Difficulties in China also have clouded Nvidia’s business. Though the Trump administration recently eased curbs on exports of some AI chips to that country, the reprieve hasn’t yet translated into a rebound in revenue.
Analysts largely looked past the outlook, with at least 10 firms raising their 12-month price targets after the results Wednesday. They raised the estimates by an average of 3% to $202.60, according to data compiled by Bloomberg, implying a gain of about 12% from Wednesday’s close.
Nvidia shares fell 1.9% at 9:52 a.m. in New York on Thursday after briefly rising at the open. They had rallied 35% this year through the close, lifting the company’s market capitalization above $4 trillion.
During a conference call with analysts Wednesday, the company’s leadership rejected the notion that interest in deploying AI infrastructure was flagging.
“The opportunity ahead is immense,” Chief Executive Officer Jensen Huang said. “We see $3 trillion to $4 trillion in AI infrastructure spend by the end of the decade.”
The company also approved an additional $60 billion in stock buybacks. Nvidia had $14.7 billion remaining under its previous repurchase plan at the end of the second quarter.
——–
Like this video? Subscribe to Bloomberg Technology on YouTube:
https://www.youtube.com/channel/UCrM7B7SL_g1edFOnmj-SDKg
Watch the latest full episodes of “Bloomberg Technology” with Caroline Hyde and Ed Ludlow here:
https://www.youtube.com/playlist?list=PLfAX25ZLrPGTygCwn55voYZ_LYyKjxokJ
Get the latest in tech from Silicon Valley and around the world here:
https://www.bloomberg.com/technology
Connect with us on…
X: https://twitter.com/technology
Facebook: https://www.facebook.com/BloombergTechnology
Instagram: https://www.instagram.com/bloombergbusiness/
Follow Ed Ludlow on X here: https://twitter.com/EdLudlow
Follow Caroline Hyde on X here: https://twitter.com/CarolineHydeTV
Listen to the daily Bloomberg Technology podcast here:
https://www.bloomberg.com/podcasts/series/bloomberg-technology
More from Bloomberg Business
Connect with us on…
X: https://twitter.com/business
Facebook: https://www.facebook.com/bloombergbusiness
Instagram: https://www.instagram.com/bloombergbusiness/
LinkedIn: https://www.linkedin.com/company/bloomberg-news/
TikTok: https://www.tiktok.com/@bloombergbusiness
