Smart chipmaker Nvidia easily beat Wall Street’s bullish financial targets in the second quarter, forecast strong sales in the current quarter and said customers will start receiving shipments of its next-generation Blackwell chip in the fourth quarter.
But with Nvidia’s earnings forecast strong, the company’s shares fell about 6% in after-hours trading on Wednesday.
Nvidia reported revenue of $30 billion in the three months ended July 28, up 122% from the year-ago period and well above the $28.9 billion analysts had expected, according to Bloomberg estimates. The company said the results were driven by sales of Nvidia’s Hopper graphics processing unit. Strong demand for Nvidia’s chips boosted net profit, with the chipmaker posting gross margins of 75.1% and adjusted earnings per share of 68 cents.
The company “implemented a change to the Blackwell GPU mask to improve product throughput,” CFO Colette Kress said in prepared remarks, adding that the company will ramp up production in the fourth quarter.
It is unclear whether the change is related to the design flaws mentioned by the tech news site. Information Earlier this month, the newspaper reported that this would delay shipments by three months or more. The timeframe falls within the company’s previous commitment to ship Blackwell in the second half of the year, albeit at the high end of that time frame.
“We expect to ship multi-billion dollars in revenue from Blackwell in the fourth quarter,” Chris said. “Demand for the hopper is strong, and shipments are expected to increase in the second half of fiscal 2025.”
Nvidia has been one of the biggest beneficiaries of the AI craze, with internet companies like Google, Meta and Amazon spending tens of billions of dollars on infrastructure to provide AI services.
While Nvidia faces competition from rival chipmaker AMD and startups including Cerebras and Groq, the company currently controls 90% of the AI chip market, according to analysts. That dominance has led to a massive surge in the company’s shares, which have more than doubled this year and now account for nearly 7% of the S&P 500.
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