Sales report from Nvidia shocks analysts
In this DML Report…
Nvidia reported $57 billion in sales for the past three months, surpassing analyst expectations of $54.9 billion, with profits reaching $31.9 billion, a 65 percent increase from the previous year and a 245 percent rise over two years. Data center revenue accounted for $51.2 billion, while the company holds $500 billion in chip orders for the next two years. Nvidia supplies approximately 90 percent of the physical technology supporting the U.S. AI sector. CEO Jensen Huang described Blackwell sales as "off the charts," with cloud GPUs sold out and accelerating compute demand, stating that the company has entered a "virtuous cycle of AI" where it is "going everywhere, doing everything, all at once." He addressed concerns about an AI bubble, noting that sales contradict such notions.
The earnings provide a boost to the U.S. economy, Wall Street, and retirement savings, as Nvidia's results are considered a key indicator for the stock market, often referred to as the "Super Bowl" of earnings every three months. Nearly 30 percent of the S&P 500 is concentrated in five companies: Nvidia, Microsoft, Apple, Amazon, and Alphabet. This reliance on AI investments raises volatility concerns, as market downturns affect 401(k)s and pension funds. Nvidia's shares rose up to 6 percent in after-hours trading, helping lift the S&P 500, Dow Jones, and Nasdaq. Prior to the report, Nvidia's stock had declined 11 percent over the past week amid a cooling AI rally, with Meta down 19 percent and Oracle down 20 percent this month, reflecting investor reassessment of AI spending sustainability. The Nasdaq fell more than 4 percent over the past week, shifting sentiment to "extreme fear."
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Founded in 1993, Nvidia evolved from a niche chip maker for home computers into a central player in global markets driven by the AI boom. It serves as a bellwether for the tech industry and broader stock market. Huang promised continued explosive AI growth. The company has consistently exceeded forecasts over the past year, setting high expectations that demand strong performance, with Wall Street anticipating significant market reactions. Nvidia's earnings may be overshadowed by upcoming reports from Walmart and the jobs data, offering additional economic insights.