Nvidia’s coming year will be a turbulent one
Subscribe to enjoy similar stories. One problem with being on top is there is often nowhere to go but down. Nvidia’s breakneck growth over the past 18 months has definitely put the company on top—both of the burgeoning artificial-intelligence market and the stock market.
The chip maker’s fiscal third-quarter report Wednesday afternoon showed annual sales crossing the $100 billion mark for the first time ever—more than double what it was generating a year ago. And the company’s $3.6 trillion market capitalization is more than $100 billion higher than that of Apple. The last point is particularly fitting since hype over Nvidia’s data center chips, known as GPUs, now eclipses what once greeted new iPhone launches.
But there is a downside too: Fully living up to the hopes that have made it the world’s most valuable company can still be a stretch. Nvidia’s third-quarter results beat Wall Street’s targets across the board, as did the company’s forecast for the current quarter. But the stock still slipped about 2% in after-hours trading since the projection beat Wall Street’s consensus estimate by the lowest margin since the company’s AI business began taking off in May of last year.
Investors will likely shake it off. The company’s previous report in August sparked an even bigger selloff, yet the shares have rebounded 24% since. But such volatility will likely be the new normal for Nvidia as it heads into a new year with a hotly anticipated new product line that is also so complex it will be constrained by supply and production challenges.
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