By Max A. Cherney and Arsheeya Bajwa
(Reuters) – Nvidia on Wednesday forecast fourth-quarter revenue slightly above expectations, but still fell short of the high expectations of some investors who have made it the world’s most valuable company.
Shares of the Santa Clara, California-based company fell about 2% in extended trading. During the regular trading session, they were down 0.8%.
The company expects fourth-quarter revenue of $37.5 billion, plus or minus 2%, compared with the average analyst estimate of $37.09 billion, according to data compiled by LSEG.
“The age of AI is in full force, driving a global shift to NVIDIA computing,” said Nvidia CEO Jensen Huang. “Demand for Hopper and anticipation for Blackwell – in full production – are incredible as base model makers scale up pre-training, post-training and inference,” he said, referring to two high-performing AI chips.
Expectations were high for the results, with Nvidia shares up more than 20% in the past two months. The stock is up nearly fourfold so far this year and is up more than ninefold in the past two years.
“Investors have become accustomed to this company’s huge hits, but that’s becoming increasingly difficult,” said Ryan Detrick, chief market strategist at Carson Group. “This was still a very solid report, but the truth is that when the bar is set so high, things only get harder.”
As demand for the company’s chips that power complex generative AI systems soars, supply chain problems have made it harder for Nvidia to report the big profit numbers that have made it a darling of Wall Street has become.
One of the bottlenecks for chip supply was the limited capacity for advanced production techniques at the company’s production partner TSMC.
The company posted third-quarter adjusted earnings of 81 cents per share, compared with estimates of 75 cents per share.
Revenue in the data center segment, which accounts for the bulk of Nvidia’s revenue, grew 112% to $30.77 billion in the quarter ended Oct. 27. The segment had registered a growth of 154% in the previous quarter.
Nvidia’s revenue is boosted by cloud companies’ continued spending on its chips as they expand data centers capable of handling the complex processing needs of generative AI.
The company said it had fixed a design flaw with its Blackwell chips by changing the blueprints used by TSMC to manufacture the chips.
(Reporting by Arsheeya Bajwa in Bengaluru; Stephen Nellis and Max A. Cherney in San Francisco; Editing by Arun Koyyur and Matthew Lewis)
