Shares rise by ten percent
Nvidia beats all expectations again
February 21, 2024, 11:28 p.m
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The boom in artificial intelligence continues unabated. Contrary to what some investors had feared, Nvidia exceeded analysts’ expectations for the sixth time in a row. The chip manufacturer also expects brilliant business in the future.
The continued high demand for chips for AI applications also gave Nvidia a strong sales boost in the fourth quarter. The revenue exceeded analysts’ expectations. The sales outlook for the current quarter was also above Wall Street forecasts. The share, which has gained almost 40 percent since the beginning of the year, climbed 9.9 percent in after-hours trading. The company reported fourth-quarter revenue of $22.1 billion. Analysts had only expected $20.4 billion in the Factset consensus. The company had promised 20 billion. Net income was $12.29 billion, compared to $1.41 billion a year ago.
The gaming segment, long the group’s largest, achieved sales of $2.9 billion. Although it remained unchanged compared to the previous quarter, it increased by 56 percent compared to the previous year. According to Chief Financial Officer Colette Kress, the year-over-year increases reflect increased sales to partners due to a normalization of inventories and increasing demand. She also pointed out that the introduction of certain graphics processors also had a positive impact.
Glowing center of the AI boom
Nvidia produces chips for gaming applications on PCs, and the semiconductors are also installed in Nintendo’s Switch game console. The company forecasts sales of around $24 billion for the current quarter, exceeding Wall Street’s Factset expectations.
Nvidia has been the biggest financial beneficiary of the AI wave so far, with major tech companies like Microsoft, Google and Apple betting heavily on the technology and requiring Nvidia’s hardware to run it. In addition to ChatGPT, a number of other popular AI products have come onto the market in recent months, including digital assistants for programming and enterprise from Microsoft.
In three years, Nvidia has gone from a company focused on chips that make video games run faster to the fiery center of an AI boom that has propelled the company to a valuation of nearly $2 trillion. The share price rise made Nvidia the third most valuable publicly traded company in the US earlier this month, before losing ground in the past two days. Only Microsoft and Apple were worth more.