Nvidia investors showed their disappointment in the chip maker’s earnings by obsessing over a previously-anticipated slight drop in gross profit margins, but they are missing the forest for the trees.
Nvidia’s GAAP gross margins — forecast to 73% for the company’s fiscal fourth quarter — are still enviable across the semiconductor industry.
Nvidia’s shares fell almost 2% in after-hours trading Wednesday. Its shares have risen almost 200% so far this year, so clearly Wall Street wanted more.
Perhaps comparing Nvidia’s 70% plus margins to former chip leader Intel Corp.’s recent third quarter GAAP margins of 15% will make investors more appreciative. No matter how much Wall Street quibbles, Nvidia’s numbers are still pretty amazing.