The Nvidia Corporation (NASDAQ: NVDA) share price has dipped in after-hours trading following the release of the company's Q3 2024 results.
The stock closed at US$145.89 during Wednesday's US trading session but fell as much as 5% during after-hours trading before making a partial recovery to US$145.72 at the time of writing.
Shares were lower despite the company reporting record quarterly revenues, which grew 94% year over year, modestly beating analyst expectations. Fourth-quarter guidance, however, appears to have fallen short of investor expectations.
The chipmaker's impressive Q3 results are also a beacon for growth trends across the broader artificial intelligence (AI) gaming and data centre segments. Here's a look.
Nvidia share price dips despite record-breaking results
Nvidia's Q3 FY25 results delivered substantial growth across key areas, but this doesn't appear to be overly impressing investors. Here's what stood out:
- Quarterly revenue climbed 17% quarter on quarter and a staggering 94% year on year to US$35.1 billion, exceeding analyst expectations of US$33.17 billion
- Data centre revenue reached a record US$30.8 billion, up 112% year on year
- Net income surged 109% year on year to US$19.31 billion, with diluted earnings per share increasing 111% to US$0.78
- Gaming revenue grew 15% year on year to US$3.3 billion
- Nvidia expects Q4 revenue to hit US$37.5 billion, plus or minus 2%, alongside robust gross margins of 73% to 73.5%
What else happened in Q3 FY25?
The Nvidia share price has been the talk of the town amongst investor circles this year. The chipmaker continued to expand its reach in AI-driven industries in Q3, securing several partnerships and product launches.
The company collaborated with cloud providers such as Amazon's AWS and Alphabet's Google Cloud to integrate its Hopper H200 GPUs in the data centre segment.
The data centre division continues to be a major growth driver for Nvidia. It booked nearly $31 billion in revenues for the quarter, which is roughly 88% of the top line.
It also announced Denmark's largest sovereign AI supercomputer and said AI adoption is increasing across industries.
Automotive revenue increased 72% year-on-year to US$449 million, driven by collaborations with automakers like Volvo and the integration of Nvidia's AI-powered systems into electric vehicles (EVs).
On the gaming front, Nvidia celebrated the 25th anniversary of its GeForce GPUs while launching RTX AI PCs and new titles featuring its advanced DLSS technology. These factors could impact the Nvidia share price.
What did management say?
Nvidia CEO Jensen Huang continues to see AI as a key theme of the future. On the topic, he stated:
The age of AI is in full steam, propelling a global shift to Nvidia computing.
AI is transforming every industry, company and country. Enterprises are adopting agentic AI to revolutionise workflows. Industrial robotics investments are surging with breakthroughs in physical AI. And countries have awakened to the importance of developing their national AI and infrastructure.
What's next for Nvidia?
Nvidia's Q4 guidance points to sustained growth, with revenue expected to rise to US$37.5 billion.
Gross margins are set to be 70%, with operating expenses of $4.8 billion. Data centres will remain the key revenue segment, so be sure to watch out for the numbers there.
According to the company:
GAAP and non-GAAP other income and expense are expected to be an income of approximately $400 million, excluding gains and losses from non-affiliated investments and publicly-held equity securities.
Nvidia share price snapshot
The Nvidia share price has risen more than 200% year to date, reflecting its AI-fuelled growth trajectory.
Its Q3 earnings beat expectations, so it will be key to see what the stock does in the days following the announcement.
In the last 12 months, the stock has risen more than 180%.
