The shares of this Chip designing company based in the US deal in developing advanced graphics processing units (GPUs) and AI solutions for gaming, data centers, automotive, and professional visualization applications was in focus after the company reported a 109 percent jump in net profits year on year.
Share Price Movement
The share price of Nvidia closed at $145.89 and touched a high of $147.56 per share on Wednesday’s trade, declining 0.76 percent from its previous close of $147.01 per share. However, the shares in after-hours show the price at $142.20 down by 2.53 percent. In the past year, the stock has delivered a 192 percent return outperforming the Nasdaq index in the same period.
What Happened
The stock movement was due to a result of an earnings update released by the company. They posted a significant increase in net profits and a jump in revenue in Q3FY25.
According to its recent filing, In Q3FY25, Nvidia reported a 94 percent increase in revenue to $35.08 billion in Q3FY25, compared to $18.12 billion in Q3FY24. Furthermore, quarterly, the company saw an increase of 17 percent in revenue from $30.04 billion in Q2FY25.
In the same period, the company reported a significant increase in net income of 109 percent to $19.3 billion in Q3FY25, up from $9.24 billion in Q3FY24 and a 16 percent increase from $16.60 billion in Q2FY25.
In terms of return ratios, return on capital employed (ROCE) is currently at 15.34 percent, while return on equity (ROE) is at 14.47 percent. The company has a strong current ratio of 1.88 and a debt-to-equity ratio of 0.28 in FY24.
Guidance for Q4FY25
The Nvidia has a given a revenue guidance of $37.5 billion (2%+/-). As per GAAP, The gross margin is expected at 73 percent (0.5% +/-), operating expenses are expected approximately at $4.8 billion, Other income is expected at $400 million, and tax rates are expected at 16.5 percent or minus 1 percent.
Revenue Mix
The company earns around 87.80 percent from Data Centers, 9.4 percent from Gaming and AI PC, 1.3 percent from Professional Visualization, and the remaining 1.25 percent from Automotive and Robotics as of Q3FY25.
Nvidia’s Collaboration with Indian Companies
Nvidia in the recently released Q3FY25 results, highlighted collaborating with cloud leaders in India to build AI infrastructure using its accelerated computing technology. Indian companies like Reliance and Ola Motors are leveraging Nvidia’s AI and Omniverse platforms to automate workflows and improve operational efficiency. Additionally, Nvidia is working with consulting firms to accelerate AI adoption across various industries in India, further driving innovation and growth in the region’s technology landscape.
About the company
Nvidia was founded in 1993 and is headquartered in Santa Clara, California. It is a leading technology company specializing in graphics processing units (GPUs) and artificial intelligence (AI) solutions.
Their business model focuses on innovation in GPU technology, serving diverse markets such as data centers, gaming, professional visualization, and automotive. Nvidia generates revenue through hardware sales, software licensing, and cloud services.
The company focuses on strategic partnerships and vertical integration to enhance improve product performance and maintain a competitive edge. By continuously investing in research and development, Nvidia aims to drive advancements in AI and high-performance computing, positioning itself as a technology leader.
Written by – Santhosh S
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