Nvidia, revenues and profits more than double for AI race. But high expectations weigh on the stock

Nvidia continues to ride the artificial intelligence race. It closed the second quarter of its fiscal year with revenues rising to $30 billion, above analysts' expectations of $28.7 billion. It also more than doubled on last year (+122%). For the third quarter, the current one, sales are forecast at 32.5 billion (a change of plus or minus 2%), also above estimates.

The American semiconductor giant, which dominates the market for artificial intelligence chips with a share of close to 90%, also reported a profit of $16.59 billion, 12% more than in the three months immediately preceding and a rise of 168% over the same period last year, when it had posted $6.18 billion. The company, in the wake of the accounts, also announced an additional $50 billion in buybacks.

But the performance, however robust, was not enough to support the stock on Wall Street in the immediate term. In the after-market it thrived to a 7% drop, which analysts explained for multiple reasons: high investor expectations, which had already anticipated bright results. Admissions of some difficulties in production to meet growing demand, which squeezed gross margins in the quarter and saw it leave generic forecasts on sales of next-generation Gpu chips, dubbed Blackwell. And a general nervousness about the future of AI and its profitability that may make stocks related to the segment volatile. Other stocks in the sector, on the Asian exchanges, suffered from the weakness.

Some statements by the top management of the American group have fuelled some doubts: 'In the fourth quarter we expect to generate several billion dollars in revenue from Blackwell,' said finance director Colette Kress without offering more details desired by traders.

Despite the downturn, Nvidia is still up 150% in one year on the stock market, with a market capitalisation of over three trillion, just behind Apple. By 2023, its shares had already gained 240%.