Nvidia Exceeds Expectations and Sets New Standards in the AI Market

The chip manufacturer Nvidia has once again exceeded expectations with its latest quarterly figures, both in terms of revenue and earnings per share. For the second quarter, the company reported earnings per share of $0.68 on a revenue of $30 billion. Analysts had only expected $0.64 in earnings per share and revenue of $28.8 billion. Compared to the same period last year, when Nvidia achieved earnings per share of $0.27 and revenue of $13.5 billion, this is an impressive increase. For the third quarter, Nvidia provided a revenue forecast of $32.5 billion, plus or minus 2%, while analysts expected $31.9 billion. However, the company's shares fell by 6% immediately after the announcement. The majority of revenue in the second quarter came from Nvidia's data center business, which generated $26.3 billion, significantly surpassing Wall Street's expectations of $25 billion. This represents a growth of 154% compared to the same period last year, when this business segment achieved $10.3 billion. Nvidia is a global leader in AI chip design and software and reportedly controls between 80% and 95% of the market, according to Reuters. This leading position is expected to be further consolidated with the imminent rollout of the next chip generation named Blackwell. According to CFO Colette Kress, Nvidia anticipates receiving billions in revenue from the Blackwell line in the fourth quarter. Nonetheless, Nvidia's competitors are not resting on their laurels. AMD recently announced its acquisition of ZT Systems for $4.9 billion to expand its capabilities in the AI system server sector. This could boost AMD's sales figures but is not expected to pose a serious threat to Nvidia anytime soon. "There are emerging competitors like AMD that are starting to gain a small share of the market," said Ruben Roy, Managing Director at Stifel, to Yahoo Finance. "But if you look at the entire investment cycle in the infrastructure, which we believe will continue to increase, Nvidia seems well-positioned to benefit from it." Nvidia's gaming division, which was formerly the company's main business, reported revenue of $2.8 billion, representing a 16% year-over-year increase.