Nvidia, Leading the AI Boom, Posts Another Earnings Surprise... Up 9% in After-Hours Trading

U.S. semiconductor company Nvidia, considered a major beneficiary of the artificial intelligence (AI) boom, has once again posted an 'earnings surprise.' In after-hours trading, Nvidia's stock price is rising more than 9%.

[Image source=Reuters Yonhap News]

On the 23rd (local time), Nvidia announced after the New York Stock Exchange closed that its earnings per share for the second quarter were $2.70. This exceeds the Refinitiv consensus estimate of $2.09. Quarterly revenue also surpassed market expectations, reaching $13.51 billion, a 101% increase year-over-year, compared to the forecast of $11.22 billion.

This strong performance had been anticipated early on. Nvidia, which supplies over 90% of the high-value-added semiconductors used in AI development worldwide, has enjoyed a boom fueled by the recent surge in generative AI, including ChatGPT. Following a surprise strong performance in the first quarter that led the New York Stock Exchange rally, Wall Street analysts raised their price targets ahead of the second quarter earnings, expecting another earnings surprise.

The second quarter results were driven by Nvidia’s data center business, which includes AI semiconductors. The data center segment’s quarterly revenue surged 171% year-over-year. Gaming revenue also increased by 22%. Jensen Huang, Nvidia’s CEO, stated in a press release, "A new era of computing has begun. Companies worldwide are shifting from general-purpose to generative AI for accelerated computing."

Along with this, Nvidia provided a rosy outlook, forecasting third-quarter revenue to reach $16 billion, far exceeding the previous estimate of $12.6 billion. Nvidia is currently conducting a live conference call starting at 5 p.m. Eastern Time. The company also announced that its board has approved a $25 billion share repurchase program.

Nvidia’s stock price is currently trading above $517 per share in after-hours trading, up more than 9%. Fueled by earnings expectations, the stock closed the regular session up 3.17%. The closing price of $471.16 represents a 222% increase compared to the beginning of the year.

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