Investors have been excited about the prospects for artificial intelligence all year, and no company has cashed in more on the AI trend than Nvidia (NVDA 6.18%). Investors had been looking forward to the semiconductor chip maker's fiscal second-quarter financial report for months, and they were far from disappointed with the results.
Indeed, Nvidia's AI-fueled growth has inspired plenty of tech stocks to follow suit with initiatives of their own. Not every company has been successful in reaching its full potential with AI, but some are doing a better job than others. As Nvidia's stock jumped on its good news, Splunk (SPLK) managed to post even larger percentage gains in its share price. Read on to get all the details on both companies and their financial reports.
Nvidia keeps its momentum strong
Shares of Nvidia rose 7% in premarket trading Thursday morning. The chipmaker's Wednesday evening release of its quarterly results for the period ended July 30 went far beyond the high expectations the company itself had set just three months earlier.
The numbers from Nvidia were amazing. Revenue came in at $13.51 billion, soaring past the $11 billion guidance that Nvidia had provided in its fiscal first-quarter report and more than doubling from the year-earlier quarter. Sales from the data segment soared 171% year over year. Earnings came in at $2.70 per share on an adjusted basis, crushing the consensus forecast for $2.07 per share.
CEO Jensen Huang said that the arms race for supremacy in artificial intelligence is accelerating, and a host of companies are turning to Nvidia for the tools they'll need to compete effectively. Whether it's major cloud service providers, top enterprise customers, or other companies looking to establish lucrative partnerships, Nvidia is finding itself at the center of a vast AI business network that puts it in the best possible position to maximize its sales and profits.
Indeed, Nvidia anticipates that its high-growth phase is far from over, as its guidance for the fiscal third quarter included revenue projections for $16 billion. With the company dedicating another $25 billion to stock repurchases, there's little doubt that Nvidia has a high level of confidence in its ability to keep performing as well as it has so far in 2023.
Splunk sees plenty of cybersecurity strength
Shares of Splunk climbed even more sharply than Nvidia, with a 13% rise in premarket trading. The provider of cybersecurity and observability software reported fiscal second-quarter financial results for the period ended July 31 that include solid growth and effective measures to cut costs.
Splunk's financial report included encouraging news. Total sales of $911 million were up 14% year over year, with a 29% rise in the key cloud segment's revenue figures. Annualized recurring revenue climbed 16% from year-ago levels to $3.86 billion. The company boasted 834 customers spending $1 million or more on its software, up by 111 customers from 12 months earlier. Yet operating expenses fell 3%, helping Splunk post an adjusted profit of $0.81 per share.
In addition, Splunk sees the full fiscal year going better than it previously expected. The software provider narrowed its range of annualized recurring revenue to the upper half of its previous guidance, and it boosted its sales projections for the full year by $25 million to $50 million, with a new range of $3.925 billion to $3.95 billion. Free cash flow should be roughly $50 million higher than Splunk previously anticipated as well.
Splunk's unveiling of its AI innovations at a recent conference got a good reception from clients, and shareholders like the trends that they're seeing. Like Nvidia, Splunk has some key collaborations that should help the software company keep taking greater advantage of AI opportunities in the months and years ahead.
