- Revenues surge 265% last fiscal year
- Stock surges after spectacular Q4/FY results
- $230 billion added to market cap overnight
Hold on to your hats, it’s going to be a thrilling ride. AI chips champions Nvidia (NVDA:NASDAQ) posted the market’s most crucial results this year and it was blockbuster action all the way.
The shares whipsawed in after-hours trading as investors digested seemingly startlingly good results. But you know what they say about things looking too good to be true, which saw the shares dip 6% before rallying as the market decided they were the real deal. Pre-market trade data has them opening up more than 14% later today, adding another $230 billion to the firm’s market cap.
AI TIPPING POINT
Nvidia declared the AI ‘tipping point’ as revenues surged by a remarkable 265% over last year, and up 22% on the prior quarter. The company posted $22.1 billion in revenue versus the $20.55 billion forecast, with earnings similarly scorching, at $4.93 per share against $4.64 estimates.
‘Despite China being down 75%, the company managed to post extraordinary results,’ said Ben Barringer, technology analyst at Quilter Cheviot.
AI superstar: Everything you need to know about investing in Nvidia
Data Centre sales, which now make up the bulk of the business, were up 409% to $18.4 billion, which over half going to hyper-scale cloud providers, such as Amazon (AMZN:NASDAQ), Microsoft (MSFT:NASDAQ) et al.
AI FOR EVERYONE
But the demand dynamics are interesting, with significant interest not only from large cloud service providers but also from consumer internet companies like Meta Platforms (META:NASDAQ), software companies like Adobe (ADBE:NASDAQ), and sectors such as automotive and governments.
This diverse demand, however, is met with supply constraints, although there are signs that these issues are beginning to ease in certain areas.
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Looking ahead, Nvidia has provided guidance for the first quarter that exceeds consensus expectations by 9%, indicating a robust outlook of 233% revenue growth year-on-year.
The company’s strong market positioning, combined with a rapidly emerging demand market, suggests that Nvidia is set to continue its growth trajectory well beyond 2024, although demand/supply dynamics, especially in the Asian supply chain, will be crucial to watch, as they will play a significant role in shaping Nvidia’s future growth.
