Nvidia recently announced its fourth-quarter revenue forecast, which was slightly above estimates. However, some investors were left disappointed as the company failed to meet the high expectations that have made it the world’s most valuable firm.
Following the announcement, shares of Nvidia fell by approximately 2% in extended trading, after closing down 0.8% earlier in the day. The company projects revenue of $37.5 billion, give or take 2% for the fourth quarter, surpassing analysts’ average estimate of $37.09 billion.
Nvidia’s CEO, Jensen Huang, expressed optimism about the future, stating, “The age of AI is in full steam, propelling a global shift to NVIDIA computing.” He highlighted the strong demand for the company’s Hopper and Blackwell AI chips, which are essential components for complex generative AI systems.
Despite the positive outlook, Nvidia’s stock has experienced significant growth over the past few months, with shares rising by more than 20%. The company’s stock has nearly quadrupled this year and has increased by more than nine-fold in the last two years.
While demand for Nvidia’s chips remains high, the company has faced challenges due to supply chain disruptions, making it difficult to achieve the revenue targets that investors anticipate. One of the key issues affecting chip supply has been the limited capacity for advanced manufacturing techniques at Nvidia’s manufacturing partner, TSMC.
In the third quarter, Nvidia reported adjusted earnings of 81 cents per share, surpassing analysts’ expectations of 75 cents per share. Despite the challenges, the company remains optimistic about its future growth and the continued demand for its products in the AI and computing sectors.
