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Nvidia's shares surge after bell on strong fourth quarter results

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2024-02-22

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Shares in Nvidia surged nearly 8% in the minutes after the AI chip giant released better-than-expected fourth-quarter figures and forecasted a stronger-than-expected March quarter. The post-close surge came after the shares lost 2.8% in normal trading ahead of the release of the results on fears that the company’s performance would not match the hype.

The earnings and revenue figures beat Wall Street’s forecasts for both, and included the bonus of an upbeat outlook for the current quarter. Nvidia said it expected $US24.0 billion in sales in the current quarter against market estimates of $US22.17 billion. Revenue for the December quarter totaled $US22.10 billion, against an expected $US20.62 billion, up 265% from a year ago (before the ChatGPT AI boom emerged mid-year). Nvidia reported $US12.29 billion in net income for the December quarter, up 769% versus last year’s $1.41 billion.

Nvidia has been the primary beneficiary of the recent technology industry obsession with large artificial intelligence models, which are developed on the company’s pricey graphics processors for servers. Nvidia’s strong sales for AI chips for servers, particularly the company’s “Hopper” chips like the H100, are the drivers of the surge. Those sales are reported in the company’s Data Center business, which is now the company’s main driver of Nvidia’s revenue and earnings. Data center sales were up 409% to $US18.40 billion in the final quarter.

Sales in its long-established gaming business, which includes graphics cards for laptops and PCs, saw a more sedate 56% year-over-year increase to $US2.87 billion. Nvidia’s smaller businesses did not show the same meteoric growth. Sales in its automotive business saw a 4% rise to $US281 million, and its OEM and other business, which includes crypto chips, rose 7% to $90 million. Nvidia’s business making graphics hardware for professional applications rose 105% to $463 million.

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