NVIDIA Shatters Expectations with Stellar Earnings Report

James Hyerczyk
Published: Feb 21, 2024, 21:43 UTC

Key Points:

  • NVIDIA's earnings soar to $5.15 per share, beating estimates.
  • Record $22.10 billion revenue driven by AI chip demand.
  • Net income hits $12.29 billion, up 33% year-over-year.
  • Stock value skyrockets, reaching a $1.72 trillion market cap.
  • B100 GPU launch set to shape NVIDIA's future growth.
Nvidia Chip

In this article:

NVIDIA Earnings Overview

NVIDIA, a leading force in the technology sector, recently announced its earnings, surpassing Wall Street expectations. The company reported an impressive $5.15 adjusted per share, with a staggering revenue of $22.10 billion. This performance notably exceeded the forecasts by analysts surveyed by LSEG, who anticipated earnings of $5.00 per share on a revenue of $22.17 billion.

Financial Highlights

The company’s financial health is robust, evidenced by a net income of $12.29 billion during the quarter, translating to $4.93 per share. This marks a significant 33% increase compared to last year’s $1.41 billion, or 57 cents per share. NVIDIA’s success is largely attributed to its dominance in the AI sector, particularly with its high-demand graphics processors for servers.

Revenue Growth

NVIDIA’s total revenue witnessed a monumental rise of 265% from the previous year. This growth is primarily driven by the sales of AI chips for servers, especially the company’s “Hopper” chips like the H100.

NVIDIA Earnings Forecast

As the market eagerly awaited NVIDIA’s fiscal fourth-quarter earnings, expectations were high. Wall Street’s consensus estimates from LSEG projected an earnings per share of $4.64 adjusted, with a revenue forecast of $20.62 billion. The company’s stock price has seen a remarkable surge, nearly quintupling since the end of 2022, elevating its market value to $1.72 trillion.

Revenue and Net Income Projections

Analysts anticipated a 240% increase in revenue year-over-year, aiming for a total of $20.6 billion, with data center revenue expected to be a significant contributor at $17.06 billion. Net income was forecasted to see a more than sevenfold increase to $10.5 billion in the January quarter.

Market Expectations and Concerns

Investors and analysts are keen to understand the sustainability of NVIDIA’s growth rates, especially in the context of its reliance on big tech companies for GPU sales. While these companies have indicated continued investment in new GPUs, the long-term demand outlook remains uncertain.

Future Prospects

NVIDIA plans to launch a new high-end server GPU, the B100, in 2024, which could influence the company’s growth trajectory. For the current quarter, analysts expect a growth rate of 208%, amounting to approximately $22.17 billion in sales.

Diversified Business Interests

While NVIDIA’s AI GPUs remain the focal point, accounting for over 80% of its sales, the company also has significant interests in other areas, including PC gaming and automotive chips.

Short-Term Outlook

In the short term, NVIDIA appears poised for continued success, buoyed by strong demand for its AI GPUs and ongoing investments from major tech companies. However, the market will closely monitor the sustainability of this growth, especially with the upcoming launch of the B100 GPU and the evolving dynamics of tech investments.

In conclusion, NVIDIA’s recent earnings report paints a picture of a company at the forefront of AI technology, experiencing remarkable growth. While the short-term outlook remains positive, the long-term sustainability of this growth will be a key area of focus for investors and analysts alike.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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