Nvidia has announced their revenue for the previous quarter had hit $US30 billion — up 16% on the previous quarter and up 154% on this time last year.
👉 Background: Nvidia was founded back in 1993 as a computer chip company - mainly for video games. But over the last few years, Nvidia has become the chip behind many of the worlds big tech companies hoping to get into AI.
👉 What happened: Now, Nvidia has announced their revenue for the previous quarter had hit $US30 billion — up 16% on the previous quarter and up 154% on this time last year. Sounds pretty good right?
👉 What else: Despite beating their guidance, Nvidia's share price dropped nearly 7% because just beating guidance isn't good enough for Nvidia’s investors.
💡When a company consistently smashes its revenue forecasts, it sets a high bar for future performance, which can be difficult to maintain over the long term.
💡Over the past few years, Nvidia's investors have become so accustomed to the company smashing its guidance, so only “beating” its guidance was a let-down for its investors.
💡Get this: there has been over $100bn in annual investment into AI so far. But this obviously hasn’t yet translated into profits for big tech. So investors are keenly watching for signs that Nvidia’s growth is plateauing, which could indicate that the market frenzy around AI is cooling off.
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