Another revenue rocket ride for Nvidia, data center sales surge

More than just about any other company, Nvidia has become the bellwether for not just the state of AI market demand, but the entire semiconductor industry. The company’s stock price and the prices for its competitors and peers have been on the rise in recent days as the market awaited Nvidia’s third quarter fiscal 2024 earnings results, and a less-than-exuberant report could have put the sector in a sour mood going into Thanksgiving.

Fortunately, Nvidia delivered a third quarter report that was beyond exuberant, as the company said it posted record revenue of $18.12 billion, up 34% from the second quarter this year, and representing an astounding 206% surge from the third quarter of fiscal year 2023. That figure also walloped analyst expectations by about $2 billion.

Included in that posting was record Data Center revenue of $14.51 billion, an increase of 41% from Q2 of fiscal 2024, and up 279% from a year ago. 

“Nvidia GPUs, CPUs, networking, AI foundry services and Nvidia AI Enterprise software are all growth engines in full throttle,” said Nvidia founder and CEO Jensen Huang. “The era of generative AI is taking off.”

Nvidia also issued a pretty rosy outlook for the fourth quarter of fiscal year 2024, saying revenue will come in at about $20 billion for the quarter, plus or minus 2%, which would translate to another year-over-year increase of more than 200%. Despite that outlook, Nvidia watchers still have one eye on potential looming threats to the company, including the prospect for growing competition in AI from Intel, AMD, and others, as well as the potential impact on regulations limiting Nvidia’s ability to sell into China.

Nvidia CFO Charlotte Kress cautioned that the latter could have an effect on Nvidia’s data center revenue in the near future. “Our sales to China and other affected destinations, derived from products that are now subject to licensing requirements, have consistently contributed approximately 20-25% of Data Center revenue over the past few quarters,” Kress stated. “We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions.

Among other numbers from the most recent quarter, overall GAAP earnings per diluted share for the quarter were $3.71, up more than 12x from a year ago and up 50% from the previous quarter. Non-GAAP earnings per diluted share were $4.02, up nearly 6x from a year ago and up 49% from the previous quarter.

Aside from the data center market revenue, other revenue sectors also reported solid sales increases. In Gaming, Nvidia pulled in revenue of $2.86 billion, up 15% from the previous quarter and up 81% from a year ago, while Professional Visualization revenue, which includes sale from Nvidia Omniverse platform, was $416 million, up 10% from the previous quarter and up 108% from a year ago. Meanwhile, Automotive revenue came in at $261 million, up 3% from the previous quarter and up 4% from a year ago.