Nvidia shares tanked to $7.62 on Thursday, but rose to $8.40 after-hours when they released earnings, showing that they beat the street Q3 earnings estimates. Revenues were $898 million and net income was $61.7 million with Q3 earnings per share of $0.20, well above the $0.12 estimate. Also, gross margins increased from 39.1% to 41.9%. Nvidia closed on Friday at $8.72, a nearly 11% increase from our buy in price of $7.859.
Nvidia has successfully transitioned its manufacturing processes to the 55nm standard, has launched a successful partnership with Apple for its new line of Mac notebooks, and their parallel computing architecture CUDA has been gaining momentum. Additionally, Nvidia has re-priced their products in order to better recapture market share from AMD's increasing price competition. Nvidia was singled out to outperform when Citi upgraded the semiconductor industry earlier this week. While being down overall for Q3, Nvidia beat what was expected of them and I am satisfied with their performance and future profitability.