Nvidia: Record results, $25 billion buyback add jet fuel to AI optimism
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・The announcement that Nvidia will buy shares of 25 billion dollars will lead to a sharp rise in stock prices
・In response to Nvidia Q2's financial results report, stock prices of big tech stocks and AI-related companies also rose
・Regarding the Q3 forecast, Nvidia's adjusted gross profit margin will be 72.5% plus or minus 50 basis points
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・NVIDIA $NVIDIA (NVDA.US)$While the artificial intelligence boom is stimulating demand for the company's chips, it was announced on Wednesday that it would significantly exceed quarterly sales forecasts and carry out a stock buyout of 25 billion dollars, and stock prices skyrocketed due to overtime transactions.
・Nvidia's predictions have exceeded expectations by billions of dollars, indicating that the boom in generative AI technology, which can read and write in a manner similar to humans, and is driven almost exclusively by Nvidia chips, is not declining.
・NVIDIA's additional $25 billion share buyout announced on Wednesday was carried out while stock prices have already tripled this year because investors are betting that NVIDIA will be the main beneficiary of the AI boom, making the company's first chip business on a scale of 1 trillion dollars in history.
・Stock prices of other big tech stocks and AI-related companies also rose in response to the Nvidia report, and Microsoft in overtime trading on Wednesday $Microsoft (MSFT.US)$1.9%, meta platform $Meta Platforms (META.US)$It surged 2.1% and Palantia Technologies surged 4.6%.
・For the current third quarter, NVIDIA expects an adjusted gross margin of 72.5% plus or minus 50 basis points. According to Refinitiv's data, analysts' average expected gross profit margin is 70.4%.
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• Analysts estimated demand for NVIDIA's valuable AI chips is at least 50% higher than supply, adding that the imbalance will continue over the next few quarters.
• “Businesses around the world are transitioning from general-purpose computing to accelerated computing and generative AI,” Nvidia CEO Jen Sen-Huang said in a statement.
・According to company executives, not only chips but the company's entire AI system contributed most to growth in the same quarter. Nvidia is known for its graphics processing units (GPUs), but it makes entire AI machines equipped with memory chips from other suppliers and tens of thousands of other components.
・Daniel Ives, an analyst at Wedbush Securities, stated that this result was “in our opinion, it was a moment to 'drop the mic' that would have a ripple effect on the technology industry throughout this year.”
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