NVDA Q2 Earnings Analysis

Among them, data center revenue hit a record, up 171% year-on-year and 141% quarter-on-quarter. This is mainly due to the NVIDIA HGX platform on its Hopper and Ampere GPU architectures, which has an excellent performance in the development of large language models and generative AI. In particular, data center computing grew 195% year-over-year and 157% quarter-over-quarter.

Meanwhile, revenue from the gaming segment grew 22% year-over-year and 11% quarter-on-quarter. This primarily reflects demand for GeForce RTX 40-series GPUs based on the NVIDIA Ada Lovelace architecture after channel inventory levels have normalized.

Notably, professional visualization revenue declined 24% year-over-year, but rose 28% quarter-over-quarter. Automotive segment revenues increased 15% year-over-year but decreased 15% quarter-over-quarter. These figures demonstrate the diversity of NVIDIA in several business areas and their flexibility in different market environments.

From a profitability perspective, both GAAP and non-GAAP gross margins improved, primarily reflecting higher data center sales. On the expense side, GAAP operating expenses increased 10% year-over-year, primarily driven by headcount and compensation increases.

The GAAP effective tax rate is 11.4%, primarily reflecting tax benefits from the foreign-sourced intangible income deduction, stock-based compensation and the U.S. federal research tax credit.

To sum up, NVIDIA's diversification strategy in 2023 not only achieved significant revenue growth in multiple dimensions, but also demonstrated its continuous innovation and flexibility in multiple business segments. The company's current financial position and performance further demonstrates its core competitiveness as a cutting-edge technology company.