Rarely have the results of a company been awaited with as much excitement as they were this Wednesday. Maybe never. Nvidia is “the most important stock on planet Earth,” according to the definition of a specialist at Goldman Sachs, perhaps the most influential company on planet Wall Street. Nvidia's reports are considered a measure of the strength of its artificial intelligence business. The microprocessor giant reported spectacular results this Wednesday that exceeded market expectations and also published ambitious forecasts that exceeded forecasts, pardon the tongue twister. Nvidia responded to the rise in the stock market outside of normal trading hours with gains of around 6%.
The Santa Clara (California)-based company achieved a 265% increase in quarterly sales to $22,103 million (around €20,400 million at current exchange rates). Profits rose an impressive 769% to $12,285 million, a record for the company.
Following these quarterly results, Nvdia's full-year revenue rose 126% to $60,922 million, while profits rose 581% to $29,760 million, according to accounts submitted to the Finance Commission. United States Securities and Exchange Commission (SEK).
Nvidia hopes for continued strong growth. The company expects revenue of approximately $24 billion, gross margin of 76.3% and operating expenses of approximately $3.5 billion and $2.5 billion, respectively. These forecasts are more ambitious than the market expected. They represent a more than tripling of sales of $7,192 million compared to the first quarter of last year and lead to spectacularly increasing profits.
Nvidia is the big winner of the artificial intelligence fever as the company develops the most powerful microprocessors. The demand for its products has grown exponentially with the high computing needs associated with generative artificial intelligence.
By business line, revenue from the data center division, the strongest, reached a record $18.4 billion, up 27% sequentially and up 409% sequentially. Full-year revenue rose 217% to a record $47.5 billion . In the video game business, the second-largest fourth-quarter revenue was $2.9 billion, flat from the previous quarter and up 56% from a year ago. Full-year revenue rose 15% to $10.4 billion.
“Computing acceleration and generative artificial intelligence have reached a tipping point. Demand is growing globally, across companies, industries and countries,” Nvidia founder and CEO Jensen Huang said in a statement. “Our data center platform is driven by increasingly diverse factors: demand for computing, training and inference from major cloud service providers and other GPU specialists, as well as enterprise, software and consumer internet.” Vertical industries – led by automotive, financial services and healthcare industries – are already moving billions of dollars.
Financial television networks in the United States such as CNBC and Bloomberg TV continued to intensively live-stream the earnings release. The conservative Fox Business, on the other hand, hosted a talk show at the close of trading with praise for Donald Trump and criticism of Joe Biden. The stock is now the most traded stock on the US stock market and many small investors have bet on it. Expectations were so high that a flat tire could have affected the entire market, but investors welcomed the numbers released.
The extent of the impact that artificial intelligence would have on Nvidia's accounts surprised everyone less than a year ago when the company released forecasts that exceeded expectations. “In the more than 15 years we've been doing this work, we've never seen guidance like the one Nvidia just presented, with second-quarter prospects that appeared to be astronomical and exceeded expectations. “Expectations,” Bernstein analysts wrote in a report sent to clients.
At the time, the company said it expected second-quarter sales of about $11 billion, compared to the market estimate of less than $7,200. Nvidia shares accelerated their rise on the stock market. The company first entered the trillion-dollar club and then overtook other tech giants. It overtook Amazon and Alphabet to become the third-largest company by market cap before investors began to feel some vertigo.
Despite the decline in sessions this Monday and Tuesday, Nvidia shares have risen about 225% in the last 12 months (not counting the reaction to the results) on fears of disappointing balance sheets, until they reached about 675 dollars per share Company worth almost $1.7 billion. The company ended the 2023-2024 fiscal year with $26 billion in cash.
The magic surrounding value is so great that it was enough for Nvidia to inform the US Securities and Exchange Commission (SEC) that it had small stakes in other modest technology companies for them to skyrocket on the stock market could speed up. And this despite the fact that he had already disclosed investments in the past that went almost unnoticed at the time.
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