NVIDIA, the multinational technology company specializing in graphics processing units (GPUs) and AI computing, has reported impressive financial results for the third quarter of fiscal year 2024. 

The company achieved record revenue of $18.12 billion, a remarkable 206% increase from the same period last year and a 34% increase from the previous quarter. NVIDIA's success can be attributed to the strong performance of its various business segments. 

The Data Center division, in particular, experienced exceptional growth, with revenue reaching a record $14.51 billion, a 279% increase compared to the previous year. This impressive growth was driven by a high demand for NVIDIA's HGX platform, which caters to the training and inferencing of large language models, recommendation engines, and generative AI applications. 

NVIDIA's Gaming segment also performed exceptionally well, with revenue totaling $2.86 billion, an 81% increase compared to the same period last year. This growth can be attributed to strong demand for the GeForce RTX 40 Series GPUs, driven by back-to-school purchases and the beginning of the holiday season. 

The Professional Visualization division experienced a significant year-on-year revenue increase of 108%, generating $416 million in revenue for the quarter. This growth was primarily driven by higher sell-in to partners following the normalization of channel inventory levels. 

Automotive revenue increased by 4% year-on-year, reaching $261 million in the third quarter. This growth was fueled by an increased demand for auto cockpit solutions and self-driving platforms.

Apart from outstanding revenue growth, NVIDIA also achieved notable improvements in gross margins. The adjusted gross margin for the quarter was 75%, a substantial increase from 56.1% in the previous year. This improvement can be attributed to a favorable product mix resulting from the growth in Data Center revenue and lower net inventory provisions. 

Operating expenses also increased, with adjusted operating expenses rising by 13% year-on-year. This increase mainly reflects the company's expansion in terms of employees and compensation.

NVIDIA's adjusted operating income demonstrated remarkable growth, reaching $11.56 billion, a significant increase from $1.54 billion in the same period last year. 

The adjusted diluted earnings per share (EPS) for the third quarter were $4.02, which compares favorably to $0.58 in the previous year, exceeding analyst estimates of $3.36.

In terms of outlook, NVIDIA is optimistic about its performance in the fourth quarter of fiscal year 2024. The company expects revenue to reach $20.00 billion, with a gross margin of about 74.5% for GAAP and 75.5% for non-GAAP, plus or minus 50 basis points. Operating expenses are anticipated to be approximately $3.17 billion (GAAP) and $2.20 billion (non-GAAP). Meanwhile, income from non-affiliated investments is expected to be around $200 million , and the tax rate is projected to be 15.0%, plus or minus 1%, excluding any discrete items. 

There is a potential concern regarding the decline in sales to China and other affected destinations due to licensing requirements. Sales from these regions have consistently contributed approximately 20-25% of Data Center revenue in recent quarters. Although NVIDIA expects a significant decline in these sales in the fourth quarter, the company believes that this decrease will be offset by strong growth in other regions. 

Overall, NVIDIA's third -quarter financial results showcase the company's continued success and its position as a key player in the technology industry. The company has capitalized on the increasing demand for AI computing, data center solutions, and gaming GPUs. With positive outlooks for the fourth quarter and ongoing innovations in various segments, NVIDIA appears well-positioned for continued growth and success in the future.

The stock sold off in initial reaction, sliding to $468 in after hours. However, investors were quick to buy the dip as the stock rocketed back to the $500 level. Investors await the conference call and comments from Jensen Huang. Supply issues will be something investors will want to track but it certainly does not appear to be an issue given the companys impressive outlook.