02/23/2024 – 15:38
Chipmaker Nvidia posted a profit of $12.2 billion in the twelve months ending January 28. The amount represents an increase of 779% compared to the same previous period. As a result, the company's shares soared in the Nasdaq post-market, recovering devaluations observed in trading sessions prior to the release of the balance sheet. Furthermore, this Friday, the 23rd, the company's market value surpassed the US$ 2 trillion mark.
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The technology giant's adjusted profit totaled US$ 12.8 billion and was US$ 5.16 per share, which means an increase of 486% compared to a year before.
The company's revenue was US$22.1 billion, an annual increase of 265%, well above the forecast by Factset analysts, who expected revenue of around US$20.4 billion. Compared to the previous quarter, growth was 22%.
The expressive numbers can be explained by the high demands for artificial intelligence chips for servers. With greater added value, they allowed the company to gain more than 10 points in gross seamanship, which ended the quarter at 76.7%, compared to 66.1% in 2023.
The main aspect of AI growth, which accounted for more than 83% of Nvidia's revenue, the data center area grew 409%, to US$ 18.4 billion.
In addition to manufacturing chips and semiconductors, Nvidia holds more than 70% of the market share in data center acceleration, which are hardware components designed to perform complex calculations by AI algorithms.
The company's gaming division was responsible for 13% of revenue, with sales totaling US$2.8 billion, an annual growth of 56%. Revenues from the business of manufacturing graphics hardware for professional applications rose 105% to US$463 million.
Finally, the automotive business was one of the only ones that showed a drop in revenue, of 4%, to US$281 million.
“Accelerated computing and generative AI have reached tipping point. Demand is increasing around the world among companies, industries and nations”, said NVIDIA founder and CEO, Jensen Huang, in the release of the balance sheet.
“We are extremely happy with the progress made in the company’s Enterprise division. Our expansion in the region is constantly on the rise, and we are committed to adopting a strategy aimed at even more significant growth in the future. We work closely with our partners and customers, aligning efforts to achieve our goals and provide the best technology currently available”, celebrated the director of Nvidia's Enterprise division for Latin America, Marcio Aguiar.
For the technology portfolio manager at Janus Henderson Investors, Richard Clode, the market debate around Nvidia since mid-2023 has been more about the growth trajectory in the coming years than about the solid results presented by the company now. .
“Since CES earlier this year and overnight during earnings, Nvidia has come a long way to convince the market that it is not about to plateau anytime soon. The main drivers for this are generational transitions in computing, the breadth of the customer base, ongoing supply constraints, its roadmap and the potential to reignite a business in China”, he analyzes.
Still in Clode's assessment, confidence in growth vectors continues to boost consensus estimates on Nvidia's sales side, which increased by more than 400% in 2023, surpassing the proportional increase in the company's share price, which, for the analyst, kept valuations under control.
“Even with the AI hype, unlike 2020, with the return of the cost of capital, the market is rewarding companies that offer solid fundamentals and we see share price performance supported by real profits and cash flow as much more sustainable”, he comments.
Clode also says that Nvidia's customer base is expanding from the traditional cloud hyperscaler concentration to enterprises across multiple industries, with management highlighting multibillion-dollar businesses in the automotive, healthcare and financial services sectors, for example.
“Then there is the unique feature of generative AI, which is the desire of governments around the world to create sovereign artificial intelligence infrastructure and capabilities,” he adds.
In a note released last Tuesday (20), analysts at Goldman Sachs called Nvidia “the most important stock on planet Earth”. The company's stock had the best performance in 2023 in the S&P 500 index.
Following the company's results, Nvidia shares jumped almost 7% in after-market trading.
Nvidia is already worth US$2 trillion
The repercussions of the release of Nvidia's balance sheet generated a rush for the company's shares, which caused the company's market value to exceed US$ 2 trillion.
With this value, the company is the fourth most valuable in the world, behind only Microsoft, Apple and Saudi Aramco.
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