Semiconductor juggernaut NVIDIA exceeded market expectations with its fourth-quarter earnings report on Wednesday. Before the unveiling, industry analysts at Goldman Sachs hailed the company as “the most important stock on planet Earth,” underlining the anticipation surrounding its performance.
The figures unveiled by NVIDIA were nothing short of extraordinary. Quarterly revenues surged to $22.1 billion, marking a remarkable 265 percent increase compared to the previous year. This figure surpassed analysts’ consensus forecast, which had predicted a 240 percent rise to $20.6 billion. Moreover, adjusted earnings per share soared to $5.15, representing a staggering 765 percent surge from the previous year’s figures and surpassing the consensus forecast of $4.64. The company’s gross margins, a pivotal indicator of profitability, continued to climb amidst the AI boom, reaching 767 percent for the quarter.
Net income for the quarter stood at $12.29 billion, or $4.93 per share, showcasing a remarkable 769 percent increase from the previous year’s $1.41 billion or 57 cents per share.
Following the release, NVIDIA shares experienced fluctuations during early after-hours trading as investors absorbed the data before eventually rallying by over 10 percent by 5 PM ET. Jensen Huang, CEO and founder of NVIDIA, emphasized that the earnings underscored the pivotal moment reached by accelerated computing and generative AI.
Addressing concerns regarding the sustainability of the company’s growth trajectory, Huang assured analysts during a call that the conditions remain favorable for continued expansion. He highlighted the persistently high demand for the company’s GPUs driven by generative AI and the industry-wide shift towards accelerators produced by NVIDIA.
Looking ahead, NVIDIA’s outlook for the upcoming year exceeded expectations, with management forecasting revenues of $24 billion for the first quarter, surpassing analysts’ estimates of $22.5 billion.
Analysts lauded NVIDIA’s performance, with Wedbush’s Dan Ives asserting that Huang has solidified his status as “The Godfather of AI.” Gene Munster from Deepwater Asset Management echoed similar sentiments, emphasizing the long-term potential driven by multiple waves of AI adoption.
Before the remarkable earnings report, NVIDIA shares had already significantly propelled the S&P 500, contributing to approximately 30 percent of the index’s gains for the year. With a 40 percent year-to-date increase and an astonishing 1585 percent surge over the past five years, some analysts caution that such growth might be unsustainable in the long term.
