As we wrote in our preview of NVDA's Q2 earnings, it is safe to say that more were paying attention to today's earnings report from Nvidia than some/all of the other giga caps or frankly any other company this quarter, thanks to the thundrous, "paradigmatic" impact Nvidia has had on the broader market. In fact, the excitement was so palpable that JPM trader Stuart Humphrey said "The anticipation is LITERALLY killing us!"
Well, the anticipation is over, and moments ago NVDA reported not only Q2 earnings that crushed estimates, but gave Q3 guidance that has absolutely blown out even the most optimistic whisper number.
Here is what NVDA reported about Q2 earnings:
Some more details on the revenue breakdown:
The hart below from Bloomberg shows all you need to know about the company's main revenue driver:
Going down the line:
Gross Margin
Expenses
The financial results in a nutshell:
Commenting on the results, CEO Jensen Huang said that “A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI... NVIDIA GPUs connected by our Mellanox networking and switch technologies and running our CUDA AI software stack make up the computing infrastructure of generative AI."
“During the quarter, major cloud service providers announced massive NVIDIA H100 AI infrastructures. Leading enterprise IT system and software providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI,” he said.
But while the Q2 results were in themselves stellar, it was the company's Q3 guidance that absolutelyblew away investors far more so than even last quarter, as the company now expects Q3 revenues of $16 billion not only some $3.5BN above Wall Street's estimate of $12.5 billion, but also above the highest whisper number of about $15.0BN!
The full Q3 guidance:
And if all that was not enough, NVDA said that the Board of Directors approved an additional $25.00 billion in share repurchases, without expiration. NVIDIA plans to continue share repurchases this fiscal year. In Q2, NVIDIA returned $3.38 billion to shareholders in the form of 7.5 million shares repurchased for $3.28 billion. As of the end of the second quarter, the company had $3.95 billion remaining under its share repurchase authorization.
In response to the stunning earnings, NVDA stock is up about 7% after hours to a new all time high of $506, and a market cap that is set to rise above $1.2 trillion tomorrow.
A back of the enveloped calculation shows that NVDA is now trading at 20x sales based on Q3 annualized run rate of $16BN