One incredible indicator that screams Nvidia's stocks Keithen Drury, The Motley Fool November 27, 2024 (Monday) 12:00 AM GMT+9 5
Revenue from Nvidia (nasdaq: NVDA) is quite an event for investors. Considering the company's growth over the past 2 years, observers are interested in what each quarter's results will bring. Nvidia's rise is a significant driving force behind the broader stock market's growth, so continuous success is important for all investors.
I believe the third quarter of fiscal year 2025 (ending on October 27) will not disappoint and may have important figures that could excite investors again.
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Demand for Nvidia's GPUs is higher than ever.
Nvidia's main products are graphics processing units (GPUs) that are often deployed in situations requiring extreme computing capacity. They stand out from other computing devices as they can process multiple calculations in parallel, making them a clear choice for workloads requiring massive computational power like training artificial intelligence (AI) models.
Since the start of the AI arms race, demand for GPUs has surged, and Nvidia has benefitted more than any other company in the market.
Revenue reached 35 billion dollars, a 94% increase from the previous year, significantly exceeding the management's own expectations, which was fully reflected in the third quarter. They had only expected 32.5 billion dollars in the third quarter, an 80% growth. This is an incredibly remarkable indicator to focus on, but the future also looks bright. Management expects 37.5 billion dollars for the fourth quarter, indicating a 70% growth.
While it is beginning to show a decreasing trend, the numbers are still unbelievably high. With management consistently surpassing revenue estimates, the actual figures may be slightly higher. Given Nvidia's track record of providing such strong guidance beats throughout 2025, and with many tailwinds in its favor, I wouldn't be surprised.
2025 seems to be another strong year for Nvidia.
One of Nvidia's risks is that a considerable portion of its revenue is concentrated in a few customers. Four unnamed customers account for about 40% of Nvidia's total revenue for the third quarter. If these clients were to stop spending, it could be a disaster for Nvidia. However, understanding who these companies are is not difficult, and they all indicate that spending will only increase throughout 2025.
One of these mysterious potential clients is a metaplatform, which has indicated a substantial increase in capital expenditure in 2025. This spending is mainly related to increased computing capacity and will benefit Nvidia. Other possible major clients like Amazon and Microsoft also indicate an increase in AI-related computing expenses in 2025. Currently, this concentration is not a problem for Nvidia but a boost.
I believe the third quarter of fiscal year 2025 (ending on October 27) will not disappoint and may have important figures that could excite investors again.
Are you missing out on the morning scoop? Sign up for the Market Day's morning news in your inbox daily. Sign up for free »
Demand for Nvidia's GPUs is higher than ever.
Nvidia's main products are graphics processing units (GPUs) that are often deployed in situations requiring extreme computing capacity. They stand out from other computing devices as they can process multiple calculations in parallel, making them a clear choice for workloads requiring massive computational power like training artificial intelligence (AI) models.
Since the start of the AI arms race, demand for GPUs has surged, and Nvidia has benefitted more than any other company in the market.
Revenue reached 35 billion dollars, a 94% increase from the previous year, significantly exceeding the management's own expectations, which was fully reflected in the third quarter. They had only expected 32.5 billion dollars in the third quarter, an 80% growth. This is an incredibly remarkable indicator to focus on, but the future also looks bright. Management expects 37.5 billion dollars for the fourth quarter, indicating a 70% growth.
While it is beginning to show a decreasing trend, the numbers are still unbelievably high. With management consistently surpassing revenue estimates, the actual figures may be slightly higher. Given Nvidia's track record of providing such strong guidance beats throughout 2025, and with many tailwinds in its favor, I wouldn't be surprised.
2025 seems to be another strong year for Nvidia.
One of Nvidia's risks is that a considerable portion of its revenue is concentrated in a few customers. Four unnamed customers account for about 40% of Nvidia's total revenue for the third quarter. If these clients were to stop spending, it could be a disaster for Nvidia. However, understanding who these companies are is not difficult, and they all indicate that spending will only increase throughout 2025.
One of these mysterious potential clients is a metaplatform, which has indicated a substantial increase in capital expenditure in 2025. This spending is mainly related to increased computing capacity and will benefit Nvidia. Other possible major clients like Amazon and Microsoft also indicate an increase in AI-related computing expenses in 2025. Currently, this concentration is not a problem for Nvidia but a boost.
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