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Nvidia shares jump after revenue spike fueled by AI chip demand

Published 02/21/2024, 04:30 PM
Updated 02/22/2024, 09:41 AM
© Reuters.

Investing.com -- Nvidia (NASDAQ:NVDA) reported better-than-expected fourth-quarter revenue and outlined a bullish forecast for artificial intelligence-fueled chip demand, sending shares sharply higher in early trading on Thursday. 

Chief Executive Jensen Huang, weighing in on a boom in so-called generative artificial intelligence that has powered a massive spike in the company's valuation over the past 12 months, said the nascent technology is at a "tipping point."

"Demand is surging worldwide across companies, industries and nations," he said.

For the three months ended Dec. 31, Nvidia announced earnings per share of $5.16 on revenue of $22.1 billion. Analysts polled by Investing.com anticipated EPS of $4.64 on revenue of $20.55 billion.

Nvidia's data center unit, a gauge of AI demand, saw revenue swell to $18.40B, up 409% from a year earlier, beating estimates of $17.06B amid rising demand for its AI graphics processors including the H100. 

"Nvidia delivered against what was seemingly a very high bar with Data Center once again serving as the key growth driver," analysts at Goldman Sachs said in a note to clients.

Speaking with investors, Huang said Nvidia's high-end chips had become "AI-generation factories" in a new industrial revolution that will encompass "every industry." The company is now looking to bolster this position, although analysts have flagged that intensifying competition and cooling sales in China may complicate this task.

Data center sales to China "declined significantly" in the fourth quarter due to U.S. government licensing requirements, Nvidia said. In a note, analysts at Bank of America said that Nvidia's future growth in the country -- which accounts for roughly a fifth of its total revenue -- could "face additional risks if shipment restrictions tighten again."

For the current quarter, revenue is expected to be $24B, give or take 2%, topping analyst estimates for $22.01B. Adjusted gross margins are expected to be 76.3% and 77.0%, respectively, plus or 50 basis points.

"We had never seen $2 bn+ of upside to quarterly revenue guidance until Nvidia did it a few quarters ago, but it has become routine during the AI surge," analysts at Morgan Stanley wrote in a note.

Yasin Ebrahim contributed to this report.

Latest comments

The global economy is becoming more interconnected.
its so good to hav Nvdia, carry on!
Chinese r really very stupid people according to the US
The CCP thinks everyone not Chinese are stupid.  Hell, the CCP thinks the Chinese commoners are stupid; they're brainwashed under the CCP's jackboots and not revolting successfully.
What do you mean according to the US? About 1/3 of Americans are programmed by right wing media to fear people who are different from them. The majority of Americans harbor no I'll will toward the Chinese people.
permabears are devastated...
pombears are spicy
0 demand ! What a joke ! Fake sales and services! Soneone needs to go to jail
Yeeha......am enjoying making profits with the bullish waves.....but better dump it before the AI 🐂💩hit the fan .... always remember my lecturer advice...... don't be greedy
as a permabear, having been negative to the markets for more than a year now, and posting negativity here day in and day out.. how can you possibly have made any profits during this time? not following your own advice...?
  I suspect a lot of people who are long-term bearish publicly are actually just trying to drive down the price so they can buy at a lower price; they're bullish privately w/ their accounts.
Wow!!!! go Jensen!
have a sell order for 1/2 of my NVDA @750. think I will keep this order since I will still have another 75 shares if the stock soars.
Can't be covered calls if it's for 75 shares.
Will go to $1000 within 2 months... why miss that?
NVDA reported $5 EPS and the stock jumped $50. Insanely hyper-valuated, P/E near 100.
eps per year will be 20. P/E = 700 / 20 = 35
it in no waY compared to smci
interesting... the China restrictions are helping. We were warned 10 years ago by you know who. And now finally biz has figured it out. Welcomed back? Or greed repositioned?
Repiglacons rule
Ten years ago? Obama?
$1000 within 2 months....
Thank you Nvidia gods.   I have $400K in this stock.  Currently worth $5.2 million.....
Keep hodling, Hog!
Well done Fred.
that would be really stupid...
Relying a company to move and shake wall street......
The stock market was trending up before NVDA existed.
BIG BIG BIG BUBBLE
VERY VERY VERY GOOD COMPANY
 Very Very Very overvalued
My concern with NVDA is that they are moving in so much market valuation to this single stock that has a massively inflated P/E, when the bubble pops it is not only going to harm NVDA but the entire economy. $2 trillion valuation is massive for such a low earning stock. It is all just speculation on technology that there is no proof can be monetized in the way people are hyping, like not to long ago with EV cars,
 You are thinking of NVDA a few years ago, when it was worth less than $100 billion. It currently has a market cap of around $2 trillion and is one of the most expensive stocks in the world. Its P/E is near 100. It has a market cap greater than the entire Chinese stock market combined. This is not the "initial growth phase" this is the "bagholder" phrase.
lol.   Nvidia mcap $2 trillion.  World wide market cap $125 Trillion.
Good evening, Dylan. If NVIDIA can hold onto earnings of $5.00 a quarter. At $700, the PE starts coming in line at 35. What's going to trash the company is when China invades Taiwan. NVIDIA relies heavily on Taiwanese chips.
Ponzi
The most grossly overvalued technology stock in history, and of course beating the rigged "estimate" wasn't already "priced-in."   What a joke.
IT'S A CONSPIRACY!!!
 Hahaha.
I hope you were short 🤣🤣🤣🤣
Wow, this initially dumped all the way down to $640. That was the true response to the valuation by bots.
Guess you should have bought at $640 then you could stop whining.
$NVDA earnings crush expectations. It should gap up hard tomorrow.
Probably 10-15%.  On it's way to $880.
So earnings per share is $5.16 for a stock with a price of about $700?
  0.74% = 0.0074
 That's what I'm saying.  She posted 0.0074% ($5.16/$700)capital return and it's incorrect.
please go to math class...
Triple sales in less than a year-thats impossible. Check accounts.
MadMax, they are faking it! It's my professional area - accounting and audit!  Check q3 and q4 reports beyond pages 1-3 ... analyse accounts!!!!
 Yes. This is all an un-audited conspiracy!
"Triple sales in less than a year" has been done many times by many companies.
NVDA is SOOOOO fake! It's the tulips' bubble folks!  I have a MA in Accounting and Audit and I have checked their report (q3 and q4).  They have huge problems of creative accounting!  I don't short or long NVDA. But ask an accountant to analyse their report and the risks associated to their structure of revenues vs expenses and do a qualitative analyse of their partners THEY ARE A BIG FAKE! THE NEXT ENRON!
So what you’re saying is you could work for Wall Street no question
You long NVIDIA
Based on what?  Your fairy dust?
In other words "Trust us bro. We made $15.3 billion in all of 2023, but trust us we are totally worth $2 trillion"
only the last quarter dude..
 You are mistaking revenue and pr.o.fits. Their 2023 profi.ts was only $15.3 billion
Fantastic!!
NVDA's receivables has a risky position as it is outstandingly strong in profile of revenues. Check also the NVDA profile with their partners. WE ARE TALKING ABOUT CREATIVE ACCOUNTING IN NVDA LIKE IN ENRON OR PARMALAT CARE. PwC as Big 4 auditor WILL DIE !
Creative account ? That´s very strong. Do you have some evidence ?
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