An unbelievable Wall Street big appetite: you generated a revenue of $30 billion over a three-month period, and yet many people are not happy, causing your share price to go down by 7% in after-hour trading:
“Nvidia, a leading technology company specializing in graphics processing units (GPUs) and Artificial Intelligence (AI), has reported its earnings for the second quarter (Q2), which ended July 28, 2024, showcasing remarkable growth fueled by demand for its AI technologies. The tech giant’s Q2 report, surpassed Wall Street expectations after it posted quarterly revenue of $30 billion, up 15% from the first quarter (Q1) and up 122% from a year ago.“
The fact that a revenue of $10 billion per month is no more enough, you will understand the real deal on where things stand. Indeed, it took the Dow, the US premium market index, decades to get to 14,000 (which happened in 2007) after it was established in 1897. But between 2007 and now, it has added 27,000 points (it did fall to 6,500 momentarily in 2009 during the great recession).
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Simply, Wall Street can create an unseen value, out of the ambient light of production and market systems. You cannot tell me that everything is fine if it took the Dow more than a century to hit 14,000, only to use less than two decades to hit the current 41,000. What again has experienced that level of acceleration? Indeed, everything has been financialized and we are living it.
And as that happens, companies must generate enormous results to remain in the game. Sure – that is what is expected in a world built on efficiency. But, from a village boy mindset, $30 billion in three months, up 122% from a year ago, should not be seen as underperforming to lose 7% of value.
At the start of this year, when chipmaker Nvidia was a slip of a thing that hovered around $48 a share, conversations about AI felt tinged with existential angst. Many leaders said they were all in, eager to learn more and vowing to disrupt themselves, lest they be disrupted. We all assumed the impact was going to be big—so big that a majority of AI experts polled predicted there was at least a 5% chance it would cause human extinction.
Interest remains strong in AI and Nvidia, which is still up 150% this year after reporting a minor production snag amid strong earnings yesterday, and up almost 3,000% in the past five years. But the mood around the speed of disruption and the immediate impact on business has shifted. More familiarity with generative AI has brought more comfort in understanding how to use it. There’s also more awareness of AI’s limitations, from the softball questions at a Google staff meetings and bots spreading disinformation to employee distrust and regulation.
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