NVIDIA: Stock Earnings Analysis

Quarterly revenue hit a record US$22.1 billion, up 22 percent from Q3 and 265 percent from the previous year. Growth was primarily driven by data center revenue, which came to US$18.4 billion, up 27 percent from Q3 and 409 percent from the previous year.
Non-GAAP earnings per diluted share rose 28 percent from Q3 to US$5.16, exceeding analysts’ expectations of US$4.64 and representing a growth of 486 percent year-over-year.

NVIDIA’s revenue for fiscal year 2024 was $60.9 billion.

NVIDIA and the Domain of Artificial Intelligence

NVIDIA has become the symbol of artificial intelligence (AI), consistently exceeding analysts’ estimates quarter after quarter. In the third quarter, NVIDIA reported revenues of US$18.12 billion, up 34 percent from the previous quarter and 206 percent year-on-year. Non-GAAP earnings per diluted share also showed significant growth

NVIDIA’s stock price tripled in 2023 and has already increased by more than 50 percent in 2024, driven by growing demand for the company’s AI-focused products and services. NVIDIA has surpassed Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) to become the third most valuable company in the world.
Along with Big Tech, NVIDIA contributed to the rise of the S&P 500 (INDEXSP: .INX), with the index surpassing the 5,000-point level on February 8.

NVIDIA and the Expansion in the Custom Chip Market

NVIDIA has also received attention for its strategic expansion into the custom chip market. The company announced its entry into this sector with the goal of maintaining its competitive advantage in the rapidly growing AI sector.
While NVIDIA’s general-purpose H100 and A100 chips were the cornerstone of its offering, the market for custom chips for AI was dominated by competitors such as Broadcom (NASDAQ:AVGO), Marvell (NASDAQ:MRVL), and AMD (NASDAQ:AMD).

Market Trends and Volatility

Despite recent success, NVIDIA’s performance was volatile in the days leading up to its fourth quarter results. However, NVIDIA’s strong stock performance reflects the broader optimism surrounding the technology industry and the continued growth of AI and other cutting-edge technologies

Future Perspectives

Overall, NVIDIA’s strong performance is symbolic of the growing importance of AI in today’s technology landscape. The company expects growth to continue in the first quarter of its fiscal year 2025. In a statement shared Wednesday, NVIDIA CEO Jensen Huang said, “NVIDIA RTX, introduced less than six years ago, is now a vast PC platform for generative AI, enjoyed by 100 million players and creators. Next year will bring important new product cycles with exceptional innovations to help push our industry forward.”

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