Nvidia’s earnings for the fourth fiscal quarter have exceeded expectations, with the AI giant posting $39.3 billion in revenue—up 78% from the previous year—and $22.1 billion in net income, a 71% year-over-year increase. Analysts had anticipated $38.1 billion in revenue and $19.6 billion in net income. The results underscore Nvidia’s dominance in AI hardware, particularly through its datacenter unit, which delivered $35.6 billion in sales, surpassing forecasts of $33.5 billion.
Despite these impressive figures, Nvidia’s stock dipped slightly in after-hours trading. The decline followed concerns over a slight dip in profit margins, attributed by CFO Colette Kress to the transition to more complex, higher-cost systems in Nvidia’s datacenter division.
CEO Jensen Huang described demand for Nvidia’s Blackwell GPU system as “amazing” in his earnings call, with projections indicating revenue of $43 billion for the next quarter, exceeding Wall Street’s estimate of $42.7 billion.
AI-Driven Growth and Future Outlook
Nvidia’s fiscal year 2024 net profit surged to $72.9 billion, marking a 145% year-over-year increase and an 875% jump from fiscal year 2023. This growth has been fueled by the AI boom, as Nvidia continues to power most generative AI models globally.
However, Nvidia’s stock has faced challenges. The company experienced a significant drop in market value last month, coinciding with concerns surrounding the release of DeepSeek, a less tech-intensive AI model from China. The selloff raised fears that newer models could reduce demand for Nvidia’s high-performance semiconductors.
Despite the recent volatility, analysts remain optimistic about Nvidia’s future. With a $3.2 trillion market cap, the company’s stock rose nearly 4% in regular trading on the earnings report, although it remains 10% below its previous highs. The average price target among 68 analysts stands at $175, suggesting a potential upside of 38% from Tuesday’s price.
Nvidia’s Market Position and AI Dominance
Nvidia remains a cornerstone of the AI revolution, dominating the GPU market with a projected 95% market share by 2025. Despite recent fluctuations, Nvidia’s technology remains critical to training large-language AI models, which has driven its remarkable performance.
While Nvidia’s stock has lagged behind the broader market over the past six months, the company’s future is tied to continued growth in AI and its innovative GPU systems. CEO Huang dismissed the idea that AI spending would slow down, emphasizing that the demand for AI technology is stronger than ever.
Nvidia’s earnings report stands as a testament to its pivotal role in the AI industry, signaling sustained growth despite short-term market challenges.
Sources: FactSet, Bank of America, Morgan Stanley
