by Chavi Mehta and Max A. Cherney
Nov 21 (Reuters) – Nvidia on Tuesday reported a better-than-expected fourth-quarter revenue forecast, citing smoother supply chains, but anticipated sluggish sales in China, weighing on its stock, which has more than tripled in value this year.
In post-closing trading, Nvidia shares moved up and down, after falling from an unprecedented peak during the session. It has grown by more than 240% this year.
Nvidia, which uses external manufacturers such as TSMC for the production of its chips, had previously indicated that it anticipated continued improvement in the supply chains for its semiconductors linked to artificial intelligence (AI).
The group is placing firm orders to ensure that its suppliers treat its requests as a priority, as demand for servers and chips used in AI has soared.
Research firm TrendFroce estimates that deliveries will grow by around 40% this year, with the rise of AI driven by products like OpenAI’s ChatGPT.
But the meteoric growth of this market takes place in a context of increased control by the United States of its technological exports to China, with restrictions on the products that Nvidia can sell in Beijing.
While the group said Tuesday that it expected these “lost” sales in China to be offset by demand in other countries, investors appear concerned. Analysts estimate that Nvidia’s order book will remain full at least until next August.
Nvidia said revenue for the current quarter is expected to be $20 billion, with a margin of error of 2%. Analysts surveyed by LSEG expected an amount of $17.86 billion on average.
Over the July-September period, the group’s adjusted turnover was $18.12 billion, compared to a consensus of $16.18 billion, notably in the wake of a 41% jump in revenue. business of the data center division.
Nvidia, however, warned that a quarter of its data center division’s sales came from China and other regions, such as the Middle East, now affected by new US government restrictions.
“We expect our sales in these destinations to decline significantly in the fourth fiscal quarter of 2024, although we believe this decline will be more than offset by solid growth in other regions,” said CFO Colette Kress in a statement. (Reporting Chavi Mehta in Bangalore and Max A. Cherney in San Francisco, with Stephen Nellis in San Francisco; French version Jean Terzian)