Nvidia Q2 Results: Robust AI demand drives Nvidia profits higher

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Nvidia second quarter earnings

Nvidia reported a net profit of $13.51 billion the highest in the past eight quarters, the share price of Nvidia rose by 4.2% on August 24, 2023. The stock surged as high as $502.99 in intraday as the company bought back shares worth $25 billion being the fifth-biggest repurchase announcement among US stocks.

In Nvidia's recent quarterly update, they announced revenue of $13.51 billion, doubling from last year, as the company is making smart moves in AI, with chips like A100 and H100 enhancing their data center's efficiency, which is important for services like ChatGPT.

Nvidia Q2 Results: Revenue 

ParticularsQ2 FY23(in $ billion)Q2 FY24(in $ billion)YoY Growth

Nvidia Q2 Results: Breakdown of Revenue Segment-wise

One of the major contributors to the total revenue is the Data Center business segment which yields a revenue of $10.32 billion which is up by 171% year on year as the artificial intelligence boom fueled demand for its chips. 

The gaming sector follows the list and announced a custom AI service using AI-powered natural interaction language to transfer games.

Professional Visualization for the second quarter ending stood at $0.379 billion, down by 24% as compared to last quarter's same period. Moreover, the automotive segment saw a growth of 15% which stood at $0.253 billion as compared to the same quarter last year.

ParticularsQ2 FY23(in $ billion)Q2 FY24(in $ billion)YoY Growth
Data Center3.80610.323171.23%
Professional Visualization0.4960.379-23.59%
OEM & Others0.140.066-52.8571

Nvidia Q2 Earnings: Profits 

ParticularsQ2 FY23(in $ billion)Q2 FY24(in $ billion)YoY Growth
Net Profit0.666.19838%

Nvidia reported a net profit of $6.118 billion for the second quarter, compared with a profit of $0.656 billion a year earlier which saw a significant growth of 843%

Profits have risen for the second quarter on account of the high demand for graphic processing units.

Nvidia Q2 Results: Dividends and Shares

Nvidia paid a dividend worth $0.04 per share in the second quarter, to all the shareholders of record on August 6, 2023. Furthermore, the company announced the buyback of shares of $25 Billion from its shareholders which has shown a positive impact on stock.

Nvidia Q2 Results: Nvidia share price target and Analyst’s view

Multiple brokerages have raised their target price as the earnings are out:

  • Rosenblatt Securities set a price target of $1,100.
  • Elazar Advisors set a price target of $1600 representing a three-fold increase in stock value from the current price.

Currently, the stock's price is 39 times its expected earnings for the upcoming year, which is more affordable than its 80 times ratio from May.

Nvidia Q2 Results: Share Price Performance

Time PeriodShare Price Performance
1 month3.25%
6 months100.69%
1 year163.29%
5 years572.12%

On August 24, 2023, Nvidia's share price rose slightly to $471.63, reaching its peak due to better-than-predicted Q2 figures. The share buyback announcement might have influenced this. During the day, it touched a high of $502.99. Nvidia shares jumped 229.47% year to date.