nvidia's revenue forecast falls short of market's high expectations - stock price drops.

Updated on November 21, 2024, 7:34 JST

From November 24 to January 25, revenue is expected to be approximately $37.5 billion, below the market's upper limit of $41 billion
Revenue is expected to double for the second consecutive year, with investors expecting a more favorable quarter

The revenue forecast provided by the leading artificial intelligence (AI) semiconductor manufacturer Nvidia for the AI sector on the 20th fell short of market expectations. It suggested the limits of remarkable growth driven by the AI boom.
According to the announcement, revenue for November 2024 to January 2025 (fourth quarter) is expected to be approximately $37.5 billion (about 5.830 trillion yen). The average analyst estimate compiled by Bloomberg was $37.1 billion, with some forecasting up to $41 billion.
Nvidia's performance outlook suggests that expectations for AI may be outpacing reality. The company's stock price has risen nearly 200% this year, making it the world's largest company by market capitalization. However, the company has not been able to fully meet product demand and has also faced production issues this year.
CEO Jensen Huang stated that the next-generation chip, the "Blackwell," is currently in "full production." Demand for the product is expected to exceed supply for several quarters. Huang CEO added that there is still demand for the previous design, "Hopper."

In the announcement materials, the CEO pointed out, "AI is changing every industry, company, and country." He stated, "Investment in industrial robots is increasing rapidly due to the groundbreaking progress of physical AI, and countries are beginning to recognize the importance of developing their own AI and infrastructure."
However, some investors were expecting a more positive quarter, and Nvidia's stock price temporarily fell by about 2% in after-hours trading following the announcement. The closing price of regular trading was $145.89.

Although the performance forecast was disappointing, Nvidia's growth over the past two years has been remarkable, showing a doubling of revenue for two consecutive years.
Revenue for August-October (Q3) increased by 94% to $35.1 billion. Earnings per share were 81 cents on a non-GAAP basis, excluding certain items. Analysts had predicted revenue of approximately $33.25 billion and earnings per share of 74 cents.

Revenue from the datacenter division, the largest business segment, doubled from the previous year to $30.8 billion, exceeding Wall Street's expectations.