Nvidia Corp. broke a high mark with its latest earnings on Wednesday, sending its shares up more than 8% in the extended session.
The company beat higher expectations by nearly $2 billion for the most recent quarter, while doing the same with its forecast for the current quarter. However, investors have increasingly focused on Nvidia's NVDA,
Long-term growth potential, management's message there also resonated.
While acknowledging that Nvidia is not providing guidance beyond the current quarter, CEO Jensen Huang said on the earnings call that “basically, conditions are excellent for continued growth” over the next two calendar years “and beyond.”
The company is benefiting from the fact that general computing is giving way to accelerated computing, and is seeing growing interest in generative artificial intelligence. These areas have “reached a tipping point,” Huang said in Nvidia's earnings statement.
“This new AI infrastructure will open up a whole new world of applications that are not possible today,” he added on the call. “We started our AI journey with large-scale cloud providers and consumer internet companies, and now every industry is on board — from automotive to healthcare to financial services to industrial to telecommunications, media and entertainment.”
The chip giant has seen frenzied customer spending on AI hardware, and that was on display again on Wednesday when the company announced its fourth-quarter financial results. Revenue was $22.1 billion, up from $6.05 billion a year earlier, while analysts had expected $20.4 billion.
Nvidia's data center revenue rose more than 400% from a year earlier to $18.4 billion, while the FactSet consensus was $17.06 billion.
Nvidia expected continued strong growth for the current quarter, which is much higher than expectations. The company is calling for revenue of $24.0 billion at the midpoint, up from $7.2 billion a year earlier, while analysts were expecting $22.2 billion. At the same time, data center revenues are expected to grow sequentially.
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Nvidia has faced supply constraints in recent quarters, but those constraints are beginning to ease, according to Hwang. At the same time, however, he expects that “demand will remain stronger” than Nvidia's supply throughout the year.
The company reported fiscal fourth-quarter net income of $12.3 billion, or $4.93 per share, compared with $1.4 billion, or 57 cents per share, in the same period a year earlier. On an adjusted basis, it earned $5.16 per share, while analysts expected $4.59 per share.
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Nvidia saw a 56% year-over-year rise in gaming revenue during the most recent quarter, with that total reaching $2.9 billion. The FactSet consensus was $2.7 billion.
It generated $463 million in professional visualization revenue, up 105%, along with $281 million in automotive revenue, down 4%. Analysts were looking for $422 million and $275 million, respectively.
The company said its software and services offerings reached an annualized run rate of $1 billion in the fiscal fourth quarter, and Nvidia is optimistic about its potential there.
“This is likely to be very important work over time,” Huang said, noting that Nvidia was “just getting started.”
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