Nvidia dubbed the ‘magnificent one’ after revenue triples in Q3

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Written on Nov 21, 2023

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Nvidia expects China restrictions to limit sales in its fiscal Q4.
James Demmert discussed its financial results today on CNBC.
Nvidia stock is up close to 250% versus the start of this year.

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Nvidia Corp (NASDAQ: NVDA) says its revenue more than tripled year-on-year in its third financial quarter. Its shares are still slightly down in extended hours.

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Nvidia says China restrictions could limit sales

What’s not sitting well with investors is that the management said export restrictions could limit sales in the current quarter.

Nvidia still, however, sees revenue at about $20 billion in Q4 which suggests a whopping 231% annualised growth on the back of strength in other regions. On CNBC’s “Closing Bell: Overtime”, James Demmert of Main Street Research said today:

There’s a lot of deep pocketed customers out there that are willing to and need to spend this money [on Nvidia chips].

In August, Nvidia Corp announced the GH200 – a next-generation graphics processing unit with more memory than the H100. Its shares are currently up close to 250% versus the start of 2023.

A fact worth highlighting: NVIDIA is making its own *CPU*, and will increasingly excel at it. To max out GPU's performance, building CPU in-house is an inevitable path.

Below is GH200, the first superchip that includes all home-grown components: CPU (Grace), GPU (Hopper), and… pic.twitter.com/oUnqvwUebx
— Jim Fan (@DrJimFan) May 30, 2023

Data center revenue remained exceptional

Nvidia said it had a super strong third quarter primarily due to an exceptional 279% year-over-year increase in the data centre revenue to $14.51 billion.

Analysts, in comparison, had called for $12.97 billion from the segment that includes its H100 and A100 chips that are key for artificial intelligence. According to Demmert:

This is a multi-year transformational change and we’re at early stages. They are at poll position and I’d like to say they’re the only game in town or as we like to call them the magnificent one.

Gaming brought in $2.86 billion in revenue in Q3 – up a better-than-expected 81% versus last year. Wall Street currently sees upside in Nvidia stock to $655 on average.

Notable figures in Nvidia Q3 earnings release

Earned $9.24 billion versus the year-ago $680 million
Per-share earnings also climbed from 27 cents to $3.71
Adjusted EPS printed at $4.02 as per the earnings release
Revenue jumped 206% year-on-year to $18.12 billion
Consensus was $3.37 a share on $16.18 billion in revenue

The semiconductor behemoth will pay a quarterly cash dividend of 4 cents a share on December 28^th. Demmert added:

Can they keep up with this incredible demand? I think this is where you have a company that’s extremely well-managed. Jensen knows this business; he knows it well.