Nvidia faces AI spending concerns

Thur, 08/29/2024

by Ellie LeTu

Source: WSJ

• Nvidia reported strong results

  • Quarterly earnings revealed a record net profit of $19.9B, despite chip production concerns.

  • New products are expected to deliver at least a 75% profit margin.

• High pressure under the spotlight

  • Nvidia’s rapid growth in AI chips puts it in the same league as Microsoft, though its annual revenue is still only half of Microsoft's.

  • The stock dropped slightly by 7% after the earnings call yesterday (08/28/2024) because of investors’ concerns on AI spending.

• Investor concerns

  • AI spending may not align with production capacity.

  • What is a good enough performance in the investors’ eyes?