Incredible NVIDIA Earnings Not Enough for Investors

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NVIDIA Corp. (NASDAQ: NVDA) released its fiscal third-quarter financial results after the markets closed on Thursday. The company posted $1.33 in earnings per share (EPS) on $2.64 billion in revenue. This compares to the consensus estimates from Thomson Reuters that called for $0.94 in EPS and $2.36 billion in revenue. The same period from last year had $0.83 in EPS and $2.0 billion in revenue.

One of the big highlights for this quarter was the announcement of NVIDIA Drive PX Pegasus, the world’s first auto-grade AI computer designed to enable a new class of driverless robotaxis without steering wheels, pedals or mirrors.

Apart from the tech, the company intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases in the coming fiscal year. Kicking this off, NVIDIA announced a 7% increase in its quarterly cash dividend to $0.15 per share from $0.14 per share, to be paid with its next quarterly cash dividend on December 15, to all shareholders of record on November 24.

In terms of management’s outlook for the fourth quarter, revenue is anticipated to be $2.65 billion, give or take 2%, with a gross margin of 60.0% and operating expenses of $600 million. There are consensus estimates that are calling for $0.97 in EPS and $2.43 billion in revenue for the coming quarter.

On the books, cash, cash equivalents, and marketable securities totaled $6.32 billion at the end of the quarter, compared with $6.80 billion at the end of the previous fiscal year.

Jensen Huang, Founder and CEO, commented:

We had a great quarter across all of our growth drivers. Industries across the world are accelerating their adoption of AI.

Our Volta GPU has been embraced by every major internet and cloud service provider and computer maker. Our new TensorRT inference acceleration platform opens us to growth in hyperscale datacenters. GeForce and Nintendo Switch are tapped into the strongest growth dynamics of gaming. And our new DRIVE PX Pegasus for robotaxis has been adopted by companies around the world. We are well positioned for continued growth.

Shares of NVIDIA closed Thursday down 1.8% at $205.32, with a consensus analyst price target of $169.55 and a 52-week range of $66.76 to $212.90. Following the release of the earnings report, the stock was initially down 0.6% at $204.00 in the after-hours trading session.