Nvidia exceeds expectations with strong results and forecasts as China sales decline significantly
Nvidia (NVDA) Exceeds Expectations with Strong Fourth-Quarter Earnings
Graphics chip giant Nvidia (NVDA) has reported fourth-quarter earnings that surpassed analysts’ expectations, both on the top and bottom lines. The company reported adjusted earnings per share (EPS) of $5.16 on revenue of $22.1 billion, beating analyst estimates of EPS of $4.60 on revenue of $20.4 billion.
Nvidia also provided higher guidance for the first quarter, anticipating revenue of $24 billion, which exceeded Wall Street’s expectations of $21.9 billion. Following the report, Nvidia’s stock price surged more than 5%, highlighting investor confidence in the company’s performance.
The strong earnings were driven by Nvidia’s Data Center business, which saw revenue of $18.4 billion, a remarkable 217% increase from the previous year. This growth was fueled by demand for data processing, training, and inference capabilities.
Despite the positive results, Nvidia’s CFO cautioned about a potential decline in data center revenue from China due to US licensing requirements. However, the company’s gaming division revenue also showed significant growth, reaching $2.9 billion, up from $1.8 billion the previous year.
Nvidia’s stock price has soared over 200% in the past 12 months, outperforming rivals AMD and Intel. The company faces competition from AMD, which is investing in AI chips, as well as from large tech companies developing their own specialized AI chips.
Nvidia has been proactive in engaging with major tech firms like Alphabet, Amazon, Meta, Microsoft, and OpenAI to discuss building custom chips for them. Despite the challenges, Nvidia remains a leading AI chipmaker with a strong growth trajectory.
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