A binary code appears on a laptop screen in the background, while the Nvidia logo appears on a phone on April 28, 2024.
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Nvidia Apple Inc. shares fell in premarket trading in the United States on Thursday, as the company's gross profit margin in the fiscal second quarter fell slightly and its revenue forecast was overshadowed by increasingly high expectations.
The company's shares fell 4.6% in early pre-market trading, but pared losses to fall 1.46% at 10:47 a.m. London time (05:47 a.m. ET).
Nvidia on Wednesday reported revenue of more than $30 billion in the third quarter of 2018, up 122% year over year.
This was the fourth straight quarter of triple-digit revenue growth, but as Nvidia continues its rapid expansion, year-over-year comparisons are becoming more difficult.
Nvidia Corp. issued third-quarter revenue guidance that beat market expectations of $32.5 billion, up 80% year-over-year but slowing from the June quarter.
Meanwhile, the company said its gross profit margin for the full year would be in the “mid-70%” range. Analysts had expected a full-year gross profit margin of 76.4%, according to StreetAccount.
However, analysts said Nvidia would have had to beat all expectations by a wide margin for its shares to rise after those numbers.
Thursday’s stock drop comes after a massive rally, with Nvidia shares up more than 150% so far this year. The stock has surged more than 750% since the start of 2023, as one of the biggest beneficiaries of the AI boom. Big tech companies are ramping up investment, buying Nvidia’s GPUs to train large AI models.
The current slide in Nvidia's share price has also affected semiconductor stocks around the world, with big names including memory maker Samsung and chipmaker Taiwan Semiconductor Manufacturing Co. falling on Thursday.
Nvidia addressed another issue during its earnings call — reported delays in its next-generation Blackwell AI chip.
“In the fourth quarter, we expect to generate multi-billion dollars in revenue from Blackwell,” Nvidia CFO Colette Kress said on a call with analysts.
The company also announced a $50 billion share repurchase program.
– CNBC's Kev Lessing contributed to this report.
