NVDA: Nvidia Stock Drops 2% Despite Double Beat, Revenue Jumps 206% to $18B

The giant chipmaker predicted current-quarter revenue above Wall Street estimates. But China sales could weigh on results.

• Nvidia stock NVDA tumbled 2% in after-hours trading on Tuesday, after the company delivered its quarterly report after the closing bell. Shares of the giant chipmaker, part of the elite tech group the Magnificent Seven, have more than doubled so far in 2023 and are just coming off their Monday record high of $504 a piece.
• For the October quarter, Nvidia’s revenue increased 206% to $18.1bn, topping Wall Street’s consensus call for $16.2bn. Net income landed at $9.24bn, above the $7.34bn expected. Adjusted earnings per share hit $4.02, comfortably beating analyst predictions for $3.37 a share, and coming above the $2.70 a share in the previous quarter.
• Why didn’t the stock fly? Even though Nvidia guided investors to expect January-quarter revenue of $20bn, the tech firm cautioned of the “significant” drop in sales to China. The largest Asian economy recently announced new restrictions on AI chips. To respond to that, Nvidia is making a chip series customized for China, where Nvidia generates about 25% of total revenue.