Artificial intelligence (AI) chip leader NVIDIA announced its second-quarter financial report after the U.S. stock market closed on the 28th, showing that its second-quarter revenue reached US$30.04 billion, an annual increase of 122% and a quarterly increase of 15%, which was better than the market consensus. of US$28.7 billion.
Among them, the revenue of the data center business, including AI accelerators, increased by 154% to US$26.3 billion, accounting for 88% of the total revenue. The gross profit margin was 75.1%, a decrease of 3.3% from the first quarter. Net earnings per share (EPS) after tax $0.68, better than expected $0.68.
However, in terms of financial forecast for the third quarter, Huida predicts that revenue for the quarter will reach US$32.5 billion. Although it is higher than the market average forecast of US$31.9 billion, it is lower than the high end of the expected range of US$37.9 billion. Frankly admitted that the latest Blackwell chip encountered difficulties in the production process. After Huida's share price closed down 2.10% to US$125.61 on the 28th, it fell another 6.89% to US$116.95 after the market closed (the deepest drop was 8%).
Huida admits that new chip production is hindered
Huida CEO Huang Renxun discussed the issue of Blackwell chips during Huida's earnings call on the 28th. However, when analysts wanted Huang to talk about more details about Blackwell's revenue, Huang Renxun refused to elaborate, which seemed to drive up the stock price. Slumped sharply after the bell.
According to Bloomberg , Huida admitted on the 28th that it did encounter difficulties in the Blackwell production process and had to modify some manufacturing processes. However, Huida emphasized that even if adjustments were required, it is expected that in the fourth quarter ending in January next year, it will still use Blackwell chips. Reap billions of dollars in revenue contributions.
Huida's financial report can no longer impress the market?
Although the financial report and forecast were better than expected, Huida's stock price still fell after the market closed. Ryan Detrick, chief market strategist of Carson Group, said :
The problem is that the expected increase in this financial forecast is much smaller than in the past few times.
Although future financial forecasts have been raised, the magnitude is not as high as in previous quarters. Although the company is still an excellent company with a revenue growth of 122%, it seems that market expectations are set a bit too high this earnings season.
In the past three consecutive quarters, Huida's revenue has grown at an annual rate of more than 200%. However, the company's ability to exceed market expectations in financial reports is facing increasing risks, because every bright performance in financial reports has promoted Wall Street. Raise the target on Huida.
To sum up, the challenges currently encountered by Huida include: difficulties in Blackwell production, too high market expectations, external doubts about the return on investment in generative AI, and the risk of technology stock bubbles. As a result, the financial report is eye-catching, but the stock price cannot be significantly stimulated.
