Nvidia’s soaring revenue and profit in the fourth quarter were attributed to the increasing demand for its chips used for artificial intelligence (AI). The company reported revenue of $22.1 billion, more than triple the amount from a year earlier, and a profit of $12.29 billion compared to $1.41 billion the previous year.
Nvidia’s strong performance exceeded Wall Street expectations, with earnings per share at $5.16, beating forecasts of $4.59 per share. Analysts had anticipated revenue of $20.4 billion for the quarter, ending the company’s fiscal year.
The surge in demand for Nvidia’s specialized chips, essential for various AI applications, such as generative AI chatbots like ChatGPT and Google’s Gemini, has positioned the company as a market leader. CEO Jensen Huang emphasized that accelerated computing and generative AI have reached a tipping point, driving global demand across industries and nations.
While facing challenges including economic uncertainties and competition from tech giants and emerging rivals, Nvidia’s market strength is expected to endure in the near future. The company projects revenue of around $24 billion for the current quarter and foresees growth continuing through 2025 and beyond.
Nvidia’s data center revenue experienced growth in all regions except China due to US export regulations. Nevertheless, the company has begun shipping alternative products to the Chinese market that do not require licenses.
Huang highlighted the company’s collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) to produce the chips designed by Nvidia. The positive outlook for Nvidia’s stock is reflected in Morgan Stanley analysts raising the price target to $750, citing the rising demand for AI chips.
With the increasing investment in generative AI and the expansion of data center infrastructure, Nvidia anticipates significant opportunities in the market, possibly doubling the world’s data center infrastructure in the next five years.
The after-hours trading reflected investors’ confidence in Nvidia, with shares jumping by 7.5% to $726. The company’s strategic positioning in the AI chip sector and continued innovation signal a promising trajectory for its future growth and market dominance.
