Binary code is displayed on a laptop screen in the background, while the Nvidia logo is displayed on a phone on April 28, 2024.
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Nvidia Shares dipped in US premarket trading on Friday, as the company’s fiscal second-quarter gross margin dipped slightly, and the revenue beat was eclipsed by the background of increasingly high expectations.
The company’s shares fell 4.6% in early premarket trading, but had pared losses to 1.46% by 10:47 a.m. London time (05:47 ET).
Nvidia reported July quarter revenue on Wednesday of more than $30 billion, up 122% year over year.
It was the fourth quarter of triple-digit revenue growth. But as Nvidia continues its rapid expansion, year-on-year comparisons are becoming more difficult.
Nvidia posted market-beating revenue guidance for its fiscal third quarter of $32.5 billion. This would result in an 80% year-on-year increase, but down from the June quarter.
Meanwhile, the company said its gross margin will be in the “mid-70% range” within a year. Analysts expect a full-year margin of 76.4%, according to StreetAccount.
However, analysts say that Nvidia will have to beat all expectations by a long shot in order to see a pop in the stock after these numbers.
Thursday’s stock pullback also comes after a meteoric rally, with Nvidia shares up more than 150% this year so far. The stock has gained more than 750% since the start of 2023, one of the biggest beneficiaries of the artificial intelligence boom. Big tech companies have increased investment and bought Nvidia graphics processing units to train large AI models.
Today’s drop in Nvidia’s share price is also weighing on shares of semiconductor companies around the world, with big names including memory maker Samsung and chip maker Taiwan Semiconductor Manufacturing Company on Thursday.
Nvidia addressed another issue during its earnings call — the reported delays to its next-generation Blackwell AI chip.
“In the fourth quarter, we expect to deliver several billion dollars in Blackwell revenue,” Nvidia Chief Financial Officer Colette Kress said in a call with analysts.
The company also announced a $50 billion share buyback program.
– CNBC’s Kif Leswing contributed to this report.
