2/22/2024

Nvidia report results exceed expectations

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Key points:

  • Nvidia’s fourth-quarter 2023 revenue was $22.10 billion, beating estimates of $20.62 billion.
  • Adjusted earnings per share for the fourth quarter were $5.16, beating estimates of $4.64.
  • Nvidia shares rose 9% in post-trading Wednesday.

Nvidia is predicting a substantial threefold surge in quarterly revenue, surpassing analysts’ projections by a wide margin. The tech powerhouse appears to have capitalized on the escalating demand for its cutting-edge artificial intelligence chips, prompting a 9% surge in its shares during post-trading on Wednesday. The persistent strong demand for Nvidia chips and GPUs remains on an upward trajectory as companies endeavor to enhance their artificial intelligence capabilities.

Report results

On Wednesday, Nvidia projected a remarkable 233% growth in first-quarter revenue, surpassing Wall Street’s predictions of 208%. In the first three quarters of 2023, Nvidia consistently reported quarterly revenue figures that exceeded analysts’ expectations by 10-20%. The company anticipates revenue of $24.0 billion for the current quarter, outpacing the average analyst estimate of $22.17 billion according to LSEG.

Following this announcement, Nvidia’s stock experienced a late-day surge, propelling the company’s market capitalization by over $129 billion. This rally also contributed to the upward movement of shares in other artificial intelligence companies, including chip designer Arm Holdings, resulting in a combined market value increase of $160 billion for Nvidia and other AI computing hardware vendors.

For the fourth quarter, Nvidia reported revenue of $22.10 billion, surpassing estimates of $20.62 billion. On an adjusted basis, the company disclosed fourth-quarter earnings of $5.16 per share, exceeding estimates of $4.64 per share. Looking ahead, Nvidia anticipates an adjusted gross margin of 77% for the first quarter, with analysts averaging a forecasted gross margin of 75.6%.

Nvidia’s growing influence

During the mid-2023 period, Nvidia’s market capitalization exceeded $1 trillion. In a noteworthy achievement, the company surpassed Amazon and Alphabet earlier this month, securing the position of the third-largest U.S. company by market value. However, a recent market pullback has resulted in Nvidia returning to the fifth position in market value rankings.

Nvidia’s heightened market value has granted it substantial influence over key indexes, including the S&P 500. As of the latest market close on Tuesday, the gains in Nvidia shares contributed to more than a quarter of the index’s overall 4% increase, which had reached a record high earlier this year.

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