Nvidia recently reported its fourth fiscal quarter earnings, surpassing Wall Street’s expectations for both earnings and sales. The company reported earnings per share of $5.16 adjusted against an expected $4.64, while revenue stood at $22.10 billion compared to the predicted $20.62 billion. These impressive results led to a 10% surge in Nvidia’s shares in extended trading. Additionally, Nvidia provided a strong revenue forecast for the current quarter, expecting $24.0 billion in sales, which exceeded analysts’ predictions of $22.17 billion in revenue.
Nvidia’s success can be attributed to the rising demand for large artificial intelligence models, which are developed on the company’s expensive graphics processors. The company’s GPUs are heavily utilized for server-based AI applications, fueling its growth. CEO Jensen Huang addressed concerns about sustaining this growth trajectory, stating that the conditions are favorable for continued expansion in 2025 and beyond. Huang emphasized the ongoing demand for Nvidia’s GPUs, driven by generative AI and a shift towards accelerators in place of central processors.
During the quarter, Nvidia reported $12.29 billion in net income, marking a significant increase of 769% compared to the previous year. The company’s total revenue witnessed a 265% rise, with Data Center sales contributing significantly to its overall revenue. Data Center sales surged by 409% to $18.40 billion, with over half of these sales going to major cloud providers. However, Nvidia faced challenges in its data center revenue due to U.S. restrictions on exporting advanced AI semiconductors to China.
Nvidia’s Chief Financial Officer, Colette Kress, acknowledged the supply constraints affecting the company’s AI GPUs. While there have been improvements in the supply of Hopper architecture products, the upcoming B100 chip is expected to face supply limitations. Huang highlighted the gradual ramp-up of new products, emphasizing that meeting demand requires time and cannot be achieved overnight. Despite the supply challenges, demand for Nvidia’s products remains robust, particularly in the Data Center segment.
While Nvidia’s Data Center business thrived, its gaming segment reported a modest 56% year-over-year growth. The gaming business, once the company’s primary revenue driver, has taken a back seat to the booming AI chip market. Nvidia’s smaller divisions, including automotive and OEM sectors, displayed mixed performance. The automotive business saw a 4% decline in sales, while the OEM and other business segments, encompassing crypto chips, recorded a 7% increase. On the other hand, the professional applications hardware division witnessed a substantial 105% growth.
Nvidia’s fourth-quarter earnings report showcases the company’s resilience and ability to capitalize on emerging industry trends. Despite facing supply chain challenges and regulatory hurdles, Nvidia’s strong performance and optimistic outlook underscore its position as a key player in the technology sector. With sustained demand for its GPUs and a diverse portfolio of products, Nvidia is poised for continued growth in the foreseeable future.