Nvidia Racing Back To $500? Chipmaker's Stock Spikes Higher In Dramatic Premarket Reversal

Shares of Nvidia Corp. NVDA reversed course in premarket trading and recouped the losses seen earlier and in Tuesday’s after-hours trading. The reversal comes as analysts shrugged off the China concerns flagged by the company after another big quarterly beat.

The company reported third-quarter earnings of non-GAAP earnings of $4.02 per share and revenue of $18.12 billion. The results exceeded the consensus estimates that put the metrics at $3.36 per share and $16.12 billion respectively.

The outperformance was helped by record Data Center revenues, thanks to strong demand arising out of the broad industry platform transition from general-purpose to accelerated computing and generative AI. 

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Looking ahead, the company guided to fourth-quarter revenue of $20 billion, plus or minus 2%, which is ahead of the consensus estimate. The revenue guidance trailed the whisper number, which is the unofficial estimate on Street, as well as the buy-side consensus.

CFO Colette Kress said the contribution from China and those regions impacted by the U.S. export restrictions, which accounted for about a quarter of Data Center revenues over the past few quarters, will be significantly lower. The company, however, expressed confidence in making up for the shortfall with strong rest-of-the-world demand.

Sell-side analysts did not lose sleep over the China weakness flagged by the company. KeyBanc Capital Markets analyst John Vinh maintained an Outperform rating and a $650 price target.

In premarket trading on Wednesday, Nvidia stock rose 1.35% to $506.20, according to Benzinga Pro data. On Monday, the stock touched an intra-day high of $505.48 and closed at a record high of $504.09. It. however, pulled back below the level on Tuesday ahead of the earnings.

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