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Nvidia has announced record-breaking revenue for its third fiscal quarter of 2024, which ended on October 31, 2023. The company reported a Q3 revenue of $18.2 billion, surpassing Wall Street expectations and marking a 206% increase year-over-year and a 34% rise from the previous quarter. The primary driver of this growth was Nvidia’s data center segment, which grew by 279% annually and 41% from the previous quarter, contributing $14.51 billion, or 79% of the total Q3 revenue.
The company’s GAAP earnings per diluted share for this quarter were $3.71, more than twelve times what they were a year ago and up 50% from the previous quarter. Non-GAAP earnings per diluted share were $4.02, showing an almost sixfold increase year-over-year and a 49% rise from the previous quarter.
CEO Jensen Huang attributed this strong growth to the shift from general-purpose to accelerated computing and generative AI across various industries. He highlighted that early adopters, including startups focused on large language models, consumer internet companies, and global cloud service providers, have been pivotal. Future growth is expected as more regional and national cloud service providers, enterprise software companies, and industries invest in AI to meet local and global demands.
Huang also noted that Nvidia’s range of products, including GPUs, CPUs, networking, AI foundry services, and Nvidia AI Enterprise software, are propelling this growth. Nvidia’s journey from a startup in a Denny’s restaurant to a tech giant valued at $1.23 trillion underscores its remarkable trajectory.
Analysts had projected Nvidia’s Q3 revenue to be $16.18 billion with $3.37 earnings per share. Looking ahead, Nvidia anticipates Q4 revenues of approximately $20 billion, plus or minus 2%, and expects GAAP and non-GAAP gross margins to be around 74.5% and 75.5%, respectively.
The U.S. government recently announced restrictions on the sale of high-end computing devices, like Nvidia’s Hopper chips, to China. This will likely lead to a significant reduction in sales of such chips in Q4. However, CFO Colette Kress indicated that growth in other regions would compensate for this decline. Nvidia is working with the U.S. government to find regulation-compliant solutions for China and the Middle East, although this process could take several quarters.
Nvidia’s data center segment includes server GPUs, networking, and AI cloud software. The company introduced the Nvidia HGX H200 with the new Nvidia H200 Tensor Core GPU, the first GPU featuring HBM3e memory. Available in the second quarter of next year, these advancements are part of the largest market expansion Nvidia has seen in decades, driven by generative AI.
In gaming, Nvidia reported Q3 revenue of $2.86 billion, a 15% increase from the previous quarter and an 81% rise from last year. The release of DLSS 3.5 Ray Reconstruction has significantly improved ray-traced images for games like Alan Wake 2 and Cyberpunk 2077. Additionally, TensorRT-LLM for Windows has boosted on-device LLM inference speed by up to four times. Nvidia now supports over 475 RTX games and GeForce Now hosts more than 1,700 games on its cloud platform.
The professional visualization segment generated $416 million in Q3, up 10% from the previous quarter and 108% year-over-year, with companies like Mercedes-Benz using Nvidia Omniverse to create digital twins for manufacturing planning.
Revenue from Nvidia’s automotive division reached $261 million, marking a 3% increase from the previous quarter and a 4% rise year-over-year.
Nvidia is collaborating with the Indian government to enhance its internal computing infrastructure. National investments in computer infrastructure are becoming a priority worldwide, with numerous countries developing their AI capabilities. Huang emphasized Nvidia’s commitment to enabling firms to develop their custom AI models to drive innovation across various industries.