This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Nvidia (NASDAQ: NVDA) released another blowout quarterly report last night, but the stock is dropping today. That's great news -- at least for those who want to get in on the massive, and ongoing, growth in sales of artificial intelligence (AI) memory chips.
After Nvidia announced its fiscal 2024 third-quarter report last night, investors knocked the stock down by as much as 4.5% on Wednesday. As of 3:15 p.m. ET, Nvidia shares were still trading lower by 2.2%.
The data center business is rocketing
It wasn't the results themselves that had some investors selling Nvidia today. Overall revenue more than tripled from a year ago and soared 34% sequentially from the prior quarter. That jump came mainly from growth in Nvidia's data center business thanks to customers craving its chips that power AI applications.
Nvidia's data center chip sales continue to soar.
After recording another $14.5 billion in sales of graphics processing units (GPUs) in the three-month period ended Oct. 29, Nvidia's sales totaled more than $18 billion for the quarter. That revenue was well ahead of the company's own guidance, but the stock is already higher by about 235% this year.
Those prior gains, along with news that restrictions on sales to China will affect those sales in coming months, had investors taking profits today.
All is well with Nvidia
The company has enough demand elsewhere, however, for it to project revenue to still grow to about $20 billion in the current fourth quarter of fiscal 2024. The stock got ahead of itself as investors anticipated the explosive growth for AI chips.
But any fears that demand would wane thanks to customers stocking up to avoid a shortage in supply were premature. Add in the drop in the stock thanks to profit taking, and Nvidia is a much cheaper stock for long-term investors to buy today.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
