Nvidia earnings top Q3 estimates as its sales across all sectors soar

Yahoo Finance Live's Julie Hyman and Brian Sozzi look at Nvidia's earnings as its gaming, chip, and data center sales surge.

Video Transcript

JULIE HYMAN: And first of all, let's start with that tale of two tech companies. Nvidia, that company coming out, as we said, set to open at a new record here after the company's third-quarter numbers-- fiscal third-quarter numbers-- beat estimates, $1.17 versus $1.11, that have been estimated by analysts-- record revenue for the company.

And the forward forecast is ahead of estimates as well. You see there that revenue beat at $7.1 billion. Fourth-quarter revenue, the company says, will be about $7.4 billion. That is ahead of estimates.

Basically, what we have been seeing from Nvidia is the company branching out from some of its core graphics chips into other kinds of businesses-- servers, data centers, as we know, crypto-- although that sector did not do as well in this current quarter. And of course, we recently talked to CEO Jensen Huang about the metaverse and the opportunities there, Brian Sozzi. But this thing has been such a darling of investors this year.

BRIAN SOZZI: Yeah, and if my back-of-the-envelope math is correct, Nvidia will open with a market cap of $740 billion, only about 30% away from being that next trillion-dollar market cap company. I mean, this is what we get from Nvidia seemingly every single quarter. They're an all-out beast of a company.

I mean, the data center business strong-- sales up 55%, gaming revenue up 42%. Crypto sales a little under pressure there. Market could absolutely care less. A very bullish conference call by Jensen Huang last night.

You have the Street out here, no surprise, showering this company with ongoing praise, saying by and large, this was a high-quality beat and raise quarter for the company, one analyst noting Nvidia firing on all cylinders. And that's why you're seeing the stock react accordingly here-- just another big company. And Julie, I can't find something that would stop Nvidia from reaching that trillion-dollar market cap. It's just this company is on a roll.

JULIE HYMAN: Yeah, and it's really interesting because even though that market cap dwarfs the likes of Intel, for example, Nvidia sales are less. It's just a matter of growth and people betting on growth here. Something else, of course, that has been something of an obstacle for some of the chipmakers has been supply. And that's something also that Dan Howley and I touched on in our conversation with Jensen Huang.

JENSEN HUANG: It'll take a while for us to be able to see a time when supply exceeds demand. I think that, through next year, demand is gonna far exceed supply. We don't have any magic bullets in navigating the supply chain. We have the support of all of our suppliers.

We're fortunate in that we are multisourced. We're fortunate in that our supply chain is quite diverse and our company is quite large.

JULIE HYMAN: And that lack of supply may have slightly held back some of the areas of growth in the company in this past quarter, as you heard him there saying that we are not gonna see supply exceed demand perhaps through next year. But Soz, it doesn't seem to have been a particular issue for the company this quarter.

BRIAN SOZZI: Yeah, and Jensen talking a little bit about this on the call last night, Julie. They are saying that they have secured and guaranteed supply for whatever they need. "Very large amounts of it" was the exact quote by their team. So that perhaps would alleviate any concerns on the Street if you were nitpicking this quarter.

Another number I have to flag here, $19.2 billion. That's how much cash Nvidia has on its balance sheet. I mean, the cash balances are starting to swell in Nvidia. And you have to start wondering, could they be going out there shopping soon for some form of acquisition just to keep this growth really in hypergrowth levels?

JULIE HYMAN: Well, if we're gonna talk about acquisitions, we've got to mention that the Arm deal is still not done, right? That's the biggie that's still hanging out there as the FTC is scrutinizing whether indeed Nvidia can complete that acquisition of Arm. That's something that Huang also commented on in our conversation with him and said, you know what? Get the deal or not, Nvidia is gonna power forward.