Today’s Nvidia Q4 Earnings: A Closer Look

The TDR Three Key Takeaways!

  1. Nvidia shares increased by 184% over the past 12 months, significantly outpacing competitors AMD and Intel, underscoring its rapid growth and market value.
  2. Analysts predict a 234% year-over-year revenue jump for Nvidia, driven by its dominance in the data center segment and increased demand for AI capabilities.
  3. Despite recent market volatility and a significant one-day market cap loss, Nvidia’s strategic focus on AI and data centers positions it for potential long-term success amidst competitive and economic challenges.

Nvidia performance and strategic decisions have been under intense scrutiny, especially with the upcoming release of its fourth-quarter earnings today. Over the past 12 months, Nvidia has seen its shares increase by 184%, a significant leap that outpaces its competitors AMD and Intel, which reported increases of 91% and 67% respectively. This surge briefly positioned Nvidia as the third-most-valuable publicly traded company globally, surpassing giants like Amazon and Alphabet, although it later fell back as these companies reclaimed their leads.

The anticipation around the Nvidia earnings report is not without reason. Analysts have projected a year-over-year revenue jump of 234%, expecting the company to report adjusted earnings per share (EPS) of $4.60 on revenue of $20.4 billion, up from $0.88 on $6.1 billion the previous year. Such projections highlight Nvidia rapid growth and its successful pivot towards becoming a dominant force in the data center segment. This shift is largely fueled by the growing demand for artificial intelligence (AI) capabilities, with Nvidia Data Center revenue expected to reach $17.2 billion for the quarter, a significant increase from $3.62 billion in the same quarter last year.

The AI boom, driven by generative AI apps, has seen companies like Meta planning to incorporate 350,000 of Nvidia flagship H100 chips into their AI data centers by the end of 2024. While the exact cost of these chips is not publicly disclosed, they are known to be quite expensive, hinting at a lucrative revenue stream for Nvidia from this deal alone.

Despite the optimism, Nvidia experienced a significant setback, losing $78 billion in market capitalization in a single day, marking the largest one-day decline in its history. This drop occurred ahead of its earnings release, reflecting market caution and adjusting expectations despite previous upgrades and positive analyst ratings. For instance, HSBC analyst Frank Lee raised his target price for Nvidia but tempered expectations for an immediate earnings boost, suggesting that Nvidia sales would align with consensus expectations rather than exceed them.

The broader context includes mixed performances among other chipmakers and potential challenges Nvidia faces, such as competition and the market’s demand for chips capable of performing both AI training and inference tasks. Analysts like Stifel’s Ruben Roy have expressed optimism about Nvidia long-term prospects, especially with its GH200 CPUGPU hybrid system for inference workloads, but also acknowledge the competitive pressures from companies like AMD.

Nvidia strategic direction, marked by its significant gains in the data center and AI sectors, contrasts with the challenges of market volatility and competitive landscapes. As the company moves forward, the focus will be on its ability to maintain momentum in its core growth areas while navigating the uncertainties of the tech market. This juxtaposition of rapid growth against a backdrop of market sensitivity underscores the complex dynamics at play in the tech industry, particularly for high-flying companies like Nvidia that are at the forefront of AI and data center technologies.
We will provide an update to our readers after the market closes today! Want to keep up to date with all of TDR’s research, subscribe to our daily Baked In newsletter.

You might also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More