Nvidia delivers upbeat guidance after blowout Q3 results on boost from AI demand

Investing.com - Nvidia reported Tuesday blowout third-quarter results and offered stronger Q4 guidance as AI-led chip demand bolstered growth in its high-margin data center business. 

NVIDIA Corporation (NASDAQ:NVDA) shares slipped 0.9% in volatile afterhours trading following the report.

Nvidia reported adjusted EPS of $4.02 on revenue of $18.12 billion. Analysts polled by Investing.com anticipated EPS of $3.36 on revenue of $16.18B.

Data center rakes in record revenue as AI-led chip demand ramps up 

The high-margin data center business, which includes chips that power artificial applications, saw revenue rise 279% to a record $14.51B in Q3 year-on-year.

Adjusted gross margin rose to 75% in Q3 from 56.1% in the same period a year earlier. 

The gaming business reported a 81% increase in revenue from a year earlier to $2.86B. 

Q4 guidance beats despite 'significant' dent from US ban on chip exports to China   

For the fiscal fourth quarter, the company forecast revenue of $20.00B, give or take 2%, topping analyst estimates from Investing.com for $17.91B.

The stronger-than-expected guidance comes even as the company flagged a significant impact on revenue from China, which accounts for about a fifth or quarter of Nvidia's data center growth, following U.S. export restrictions of AI chips to China. 

"We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions," said Colette Kress, NVIDIA’s chief financial officer.