Nvidia Corporation (NASDAQ: NVDA) has emerged as the frontrunner in providing cutting-edge solutions to enterprises for ramping up their generative AI deployments. The chipmaker is thriving on the rapid transition from general-purpose computing to accelerated computing. The market will be closely watching the company’s upcoming earnings as it could trigger sharp stock movements.
The graphic card behemoth’s stock has been in an upward spiral for more than two years, setting new records regularly. In 2023, NVDA was the top-performing Wall Street stock, making record gains during the year. The stock hit a new high of $739 this week. Despite the high price, it continues to be an attractive investment option considering the promising opportunities that await the company. In general, analysts are quite bullish in their price targets.
Estimates
The tech firm is preparing to publish fourth-quarter earnings on February 21, at 4:20 p.m. ET. It is expected that the Q4 outcome will match the blockbuster results of the previous quarter. Analysts predict a multi-fold increase in adjusted earnings to $4.56 per share, from last year’s $0.88 per share. The market is looking for revenues of $20.3 billion for the January quarter, compared to $6.05 billion in Q4 2023.
The company looks poised to maintain the current growth momentum in the new fiscal year and beyond, leveraging its prowess in AI computing. Nvidia’s recent success can be attributed to its innovative portfolio, combined with strong market position in data-center and gaming. In AI, the company enjoys a first-mover advantage, but it is not immune to the growing competition both in the US and international markets.
While supply chain uncertainties and geopolitical issues remain a challenge, Nvidia has strategies in place to deal with them, such as the launch of China-specific chips to overcome curbs imposed by the US government.
“Demand was strong from all hyperscale CSPs as well as from a broadening set of GPU-specialized CSPs globally that are rapidly growing to address the new market opportunities in AI. NVIDIA H100 Tensor Core GPU instances are now generally available in virtually every cloud with instances and high demand. We have significantly increased supply every quarter this year to meet strong demand and expect to continue to do so next year. We will also have a broader and faster product launch cadence to meet a growing and diverse set of AI opportunities,” Nvidia’s CFO Colette Kress said at the Q3 earnings call.
Record Revenue
Net income, adjusted for one-off items, increased sharply to $4.02 per share in the third quarter from $0.58 per share in the same period of 2023 and exceeded estimates, marking the fourth beat in a row. On a reported basis, third-quarter net income was $9.24 billion or $3.71 per share, vs. $680 million or $0.27 per share a year earlier. Revenues more than doubled to $18.12 billion in the October quarter. The core Data Center business expanded significantly and Gaming revenue surged 81%. The top line beat estimates for the fifth time in a row.
NVDA traded above its 12-month average in recent months. The stock, which has grown an impressive 53% since the beginning of 2024, traded higher on Friday.