Nvidia Revenue Doubles Amid Circular Financing Concerns
Nvidia reported a 105.8% revenue increase to $96.22 billion, though stock prices remain stagnant due to concerns over its investments in AI labs.
Nvidia Corporation reported revenue of $96.22 billion, representing a 105.8% increase, with earnings per share of $2.22 exceeding the $2.09 consensus. The company provided guidance of $108.0 billion for the next quarter, marking its sixth consecutive earnings beat.
Despite these figures, the stock has remained stagnant at $214.13. Market scrutiny focuses on circular financing, as the company has invested nearly $50 billion in frontier AI labs and carries $108.5 billion in guarantee obligations. Management admitted that labs supported by the company's balance sheet are expected to drive approximately 25% of business next year.
Nvidia also faces potential margin compression, with gross margins expected to bottom at 71% to 72% because of rising memory costs. While 62 analysts maintain a bullish consensus target of $328.72, the stock's performance now depends on whether customers can independently fund their compute requirements.
