NVIDIA Q3 Earnings Surprise... Stock Down Amid China Export Control Concerns

Sales of $18.1 billion, net profit of $9.2 billion
Exceeds market expectations

NVIDIA, a leader in the artificial intelligence (AI) semiconductor market, recorded an earnings surprise again in the third quarter of this year. However, the stock price declined as the U.S. government's semiconductor export restrictions are expected to impact the fourth quarter results.

Jensen Huang, CEO of NVIDIA

NVIDIA announced on the 21st (local time) that its revenue for the fiscal third quarter (August to October this year) reached $18.12 billion (23.3929 trillion KRW), more than tripling compared to $5.93 billion in the same period last year. Net income also surged to $9.2 billion from $680 million a year ago. Earnings per share (EPS) were recorded at $4.02, significantly exceeding market expectations (revenue of $16.19 billion, EPS of $3.37).

Jensen Huang, CEO of NVIDIA, said, "This strong growth is due to computing transitioning into a new era and the rapid rise of the generative AI market, such as OpenAI's ChatGPT."

Data center revenue, which includes AI semiconductors, increased nearly fourfold to $14.51 billion from $3.8 billion in the same period last year. Gaming segment revenue was $2.86 billion, slightly surpassing the expected $2.68 billion. NVIDIA explained, "We recorded strong sales performance driven by global demand for large language model training and inference, as well as generative AI applications."

NVIDIA projected fourth-quarter revenue of approximately $20 billion, significantly exceeding the $17.86 billion forecast compiled by financial information provider LSEG. However, NVIDIA expects that some U.S. government export restrictions will affect fourth-quarter revenue. Last month, the U.S. government announced semiconductor export controls to China and also imposed controls on semiconductor and semiconductor equipment exports to 21 countries where U.S. weapon exports are prohibited.

NVIDIA's stock price closed down 0.92% before the earnings announcement on the day. In after-hours trading, profit-taking sales emerged, and the stock is currently down 0.89%. This is analyzed to be due to the negative revenue outlook.

Meanwhile, NVIDIA's stock price has risen 241% since the beginning of the year, far outperforming the S&P 500's increase of 18.2% during the same period.

This content was produced with the assistance of AI translation services.