Rarely have the results of a company been awaited with such anticipation as this Wednesday. Maybe never. Nvidia is “the most important value on planet Earth,” in the definition of a Goldman Sachs specialist, perhaps the most influential firm on the planet Wall Street. Nvidia's accounts have been received as a thermometer of the strength of the business associated with artificial intelligence. The microprocessor giant announced spectacular results this Wednesday, above what the market expected, and has also published some ambitious forecasts that exceed the forecasts, pardon the tongue twister. Nvidia has reacted to the rise in the stock market outside of normal trading hours, with increases of around 6%.
The company based in Santa Clara (California) achieved a 265% increase in quarterly revenue, up to 22,103 million dollars (about 20,400 million euros at the current exchange rate). Profits have skyrocketed an impressive 769%, to $12,285 million, record figures for the company.
After these quarterly accounts, Nvdia's revenue for the year as a whole grows by 126%, to $60,922 million, while profit increases by 581%, to $29,760 million. according to accounts reported to the United States Securities and Exchange Commission (the SEC).
Nvidia hopes to continue growing at a strong pace. It expects revenue to be around $24 billion, with gross margins of 76.3% and operating expenses of approximately $3.5 billion and $2.5 billion. These forecasts are more ambitious than what the market expected. They imply more than tripling the $7,192 million in revenue from the first quarter of last year and translate into rising profits at a spectacular rate.
Nvidia is the big winner of the artificial intelligence fever, as it designs the most powerful microprocessors. The demand for its products has grown exponentially with the high computing needs associated with generative artificial intelligence.
By business, revenue from the data center division, the most thriving, reached a record figure of $18.4 billion, 27% more than the previous quarter and 409% more than a year ago. Full-year revenue increased 217% to a record $47.5 billion. Regarding the video game business, the second largest, fourth quarter revenues amounted to $2.9 billion, unchanged from the previous quarter and 56% more than a year ago. Full-year revenue rose 15% to $10.4 billion.
“Computational acceleration and generative artificial intelligence have reached a tipping point. Demand is growing around the world, in companies, sectors and countries,” said Jensen Huang, founder and CEO of Nvidia, in a statement. “Our data center platform is driven by increasingly diverse factors: the demand for data processing, training and inference from large cloud service providers and other GPU specialists, as well as software and Internet companies of consumption. Vertical industries—led by automotive, financial services, and healthcare—already move billions of dollars.
Financial television in the United States, such as CNBC and Bloomberg TV, have maintained intense live coverage of the publication of the figures. The conservative Fox Business, on the other hand, had a talk show at the close of the market with praise for Donald Trump and criticism of Joe Biden. The stock has become the most traded on the US stock market and many small investors have bet on it. Expectations were so high that a puncture could have dragged down the entire market, but investors have applauded the published figures.
The size of the impact that artificial intelligence was going to have on Nvidia's accounts caught everyone by surprise less than a year ago, when the company published forecasts that went off the chart. “In the more than 15 years that we have been doing this work, we have never seen a guide like the one that Nvidia has just presented with prospects for the second quarter that, by all accounts, have been astronomical and that have dashed expectations,” Bernstein analysts wrote in a report sent to clients.
Then the company said that expected revenues of about $11 billion in the second quarter, when what the market estimated was 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 technology giants. It surpassed Amazon and Alphabet and became the third company by market capitalization before investors began to feel some vertigo.
Despite the fall in the sessions this Monday and Tuesday, for fear that the accounts would disappoint, Nvidia shares have risen around 225% in the last 12 months (not counting its reaction to the results), until around 675 dollars per title, which gives the company a value close to 1.7 billion dollars. The company closed the 2023-2024 financial year with $26 billion in cash.
The magic around the value is so much that it was enough for Nvidia to inform the United States Securities and Exchange Commission (the SEC) that it had small stakes in other modest technology companies for them to skyrocket on the stock market. And this, despite the fact that in the past he had already revealed those investments, which at that time went almost unnoticed.
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