Not Stopping Soon – NVIDIA’s Earnings Report
It’s not often that the entire stock market is closely watching your company’s earnings report, but that is exactly what happened with NVIDIA. NVIDIA is one of the largest tech companies in the world, designing and manufacturing GPUs along with other chip systems in what is a key aspect of our economy today. After all, we know that almost everything runs on chips today. NVIDIA has been in tough competition with businesses like AMD and TSMC when it comes to chips, but recently they have found what could be one of the largest competitive advantages in the market right now. GPUs are vital for artificial intelligence and machine learning platforms, the hottest technology in the world right now, and it just happens to be that NVIDIA has a whopping 88 percent market share in GPUs and their technology has been extremely effective for AI businesses.
The effect of the AI boom on NVIDIA’s business has been understood by the market since the beginning of 2023; its shares have been up by more than 200 percent since then. Essentially, all Wednesday’s earnings report needed to do was reinforce that hold and show that NVIDIA is the future.
That is exactly what happened, and more, NVIDIA reported some of the best earnings we have seen in a while. Earnings per share were $2.70 and revenue was $13.51 billion, beating analyst expectations of $2.09 and $11.22 billion, respectively. That revenue figure is up from $6.7 billion in the same quarter last year and 88 percent from the previous quarter, which is historic for the business. One of the largest portions of this is NVIDIA’s data center business, which includes its AI chips, and this segment contributed to $10.32 billion in revenue, up 171 percent from the year before. NVIDIA’s profit numbers were absolutely absurd, up 843 percent year over year to $6.188 billion, showing the magnitude of the generative AI boom. CEO Jensen Huang said that there are trillions of dollars to be made with these data centers, and NVIDIA will not stop anytime soon with the grip they have. AI is only going to get larger and larger, leaving NVIDIA in perfect positioning as the other parts of their business-like gaming are seeing growth once again too. NVIDIA touched all-time highs before reversing yesterday, but with this earnings report, the sky’s the limit for its share price.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.