Chipmaker Nvidia Estimates Revenue Of $16 Billion In Q3; Stock Rallies Over 220% In Less Than 8 Months

AI-giant, Nvidia's second-quarter earnings for FY24 crushed the street's expectations with record revenue and triple-digit growth across verticals. Hence, Nvidia's Q2 earnings have surpassed expectations. For the third quarter, the chipmaker has estimated its revenue to be around $16 billion. Tech giant Nvidia shares have been on a winning streak since the start of this week, rising by nearly 9% on the Nasdaq in three days. But did you know Nvidia has become a multi-bagger with a whopping 229% returns year-to-date?

During its Q2 financial results, Nvidia also declared its outlook for the third quarter.

In Q3, the company expects revenue to be $16.00 billion, plus or minus 2%. This would be a rise of 18.43% compared to the revenue bagged in Q2 of the current fiscal. However, if looked closely, the growth will slow down in revenue terms on a quarter-on-quarter basis, as in Q2, the sequential upside is a massive 88%.

Other key outlooks in Q3 are:

- GAAP and non-GAAP gross margins are expected to be 71.5% and 72.5%, respectively, plus or minus 50 basis points.

- GAAP and non-GAAP operating expenses are expected to be approximately $2.95 billion and $2.00 billion, respectively.

- GAAP and non-GAAP other income and expense are expected to be an income of approximately $100 million, excluding gains and losses from non-affiliated investments.

- GAAP and non-GAAP tax rates are expected to be 14.5%, plus or minus 1%, excluding any discrete items.

In the second quarter, the company beat estimates with record revenue of $13.51 billion in the quarter ending June 30, 2023, rising by 101% year-on-year and 88% quarter-on-quarter. Also, the company witnessed record Data Center revenue of $10.32 billion, up 141% from Q1, up 171% from a year ago. Further, the chipmaker posted a net income of $6.188 billion, skyrocketing by a huge 843% YoY and 203% QoQ. Operating income growth also witnessed massive growth of 1,263% YoY and 218% QoQ to $6.800 billion in the quarter.

On Wednesday, Nvidia's stock price ended at $471.16, up 3.17% on Nasdaq. But the stock has become a star performer of 2023 on the tech-heavy index. In six months, the stock rallied by $238.30 or 102.34%, but year-to-date, the upside is huge at $328.01 or 229.14%.

This AI-giant traded near $143 level at the start of January 2023 and has skyrocketed to over $481 per share this week. The stock touched a new 52-week high of $481.87 on August 22, a day before the earnings report.

However, during the afterhours of August 23rd trade, Nvidia shares even crossed $500 mark by touching $502.10, recording a single-day upside of 6.6%.

According to Investing.com, 12 analysts have recommended 'Buy' on Nvidia shares based on its moving averages, while 10 experts suggested 'Buy' based on the stock's technical indicators. There were no recommendations for selling. The stock's RSI is 66.382, while its MA5 exponential comes around $467.93. Hence, the stock has a 'strong buy' recommendation on it.

Nvidia's AI is at a booming stage and the company in the latest developments has launched a host of technologies, starting with DLSS 3.5, the next step forward of its breakthrough AI neural rendering technology. But NVIDIA didn't stop there. DLSS is coming to more AAA blockbusters; emotion is being added to AI-powered non-playable characters (NPCs); Xbox Game Pass titles are coming to the GeForce NOW cloud-gaming service; and upgrades to GeForce NOW servers are underway.

Further, on August 22, the company announced the expansion of their strategic partnership with VMware to ready the hundreds of thousands of enterprises that run on VMware's cloud infrastructure for the era of generative AI.

VMware Private AI Foundation with NVIDIA will enable enterprises to customize models and run generative AI applications, including intelligent chatbots, assistants, search and summarization. The platform will be a fully integrated solution featuring generative AI software and accelerated computing from NVIDIA, built on VMware Cloud Foundation and optimized for AI.