Nvidia Earnings Soar over Demand for High-End AI Chip, Pulling Nasdaq Up to Week High

Nvidia Corp. (NASDAQ, NVDA), the AI-mania stock of the year, a giant graphics card manufacturer and the leader of AI-related data center, has announced outstanding 2Q2023 fiscal results that reflected high demand for chip processors for AI applications.

The earnings announcement on Wednesday pushed NVDA’s share price over +3.1% to $471 per share and $502 or +6.5% in the after hours. The boom on tech stocks led the tech-heavy NASDAQ Composite Index to go up to 13,721 or +1.6% to a weekly record high after falling to 13,290 last week.

The announcement from yesterday (23 Aug 2023) reported the revenue with +88% QoQ and +101% YoY at $13.51 billion, mainly from Data Center segment that accounted for $10.32 billion (+141% QoQ and +171% YoY.) Nvidia reported a net income of $6.7 billion for the quarter ended 30 July, representing an increase of +422% from the same period last year. Its high net income growth was the result of the gross margin that jumped over 25 percentage points from the previous quarter to 71.2%.

The results cause an increase in Generally Accepted Accounting Principles (GAAP) diluted earnings per share to increase +202% QoQ and +854% YoY to $2.48. Non-GAAP also increased to $2.7 (+148% QoQ and +429% YoY).

Should NVDA trade over $500 per share, the P/E ratio will be over 200x like TESLA last year, which is 10 times higher than usual stock at 20x – 30x.

Many major enterprise IT system and cloud service providers had announced a partnership with Nvidia. This will be a massive AI infrastructures adoption to many industries and so on the Nvidia’s revenue. With massive money, Nvidia has announced a share repurchase program for 7.5 million of its own shares, returning $3.38 billion to shareholders in this second quarter and giving out cash dividend at $0.04 per share which is scheduled on 28 September this year.