Nvidia shone brighter than Wall Street speculated, shaking off concerns, as it unveiled impressive fourth-quarter earnings surpassing analyst expectations post market close on Wednesday.
The tech giant not only delivered on robust past performance but also forecasted a promising upcoming quarter, reflecting an unyielding AI-driven growth path that could extend through to 2025.
Wall Street expected revenue to touch $38.05 billion; Nvidia’s financial results, however, revealed a hefty $39.33 billion revenue, alongside an adjusted earnings per share of $0.89, outpacing the anticipated $0.84.
Looking ahead, Nvidia anticipated first-quarter revenues to hover around $43 billion, marginally up from the $41.78 billion foreseen, indicating an impressive 65% annual growth, albeit slightly down from the staggering 262% seen the prior year.
Colette Kress, Nvidia’s CFO, suggested a “significant ramp” in Blackwell, their next-gen AI chip sales as part of the upcoming quarter’s strategic focus. The quarter witnessed a surge in net income, marking a leap to $22.09 billion or 89 cents per share, compared to $12.29 billion or 49 cents per share, year-over-year.
Despite Nvidia’s gross margins contracting three percentage points to 73%, owing to pricier and sophisticated data center products, its march on AI performance pedals a 78% revenue ascension in the quarter, leading to an overall fiscal-year revenue hike of 114% to $130.5 billion. Nonetheless, as Nvidia grows bigger, its growth pace softens despite fourth-quarter sales tripling year-on-year, with shares navigating modestly during after-market hours.
The logistical constraints around Blackwell have receded, and its release signals a revenue stream exceeding prior expectations. Nvidia envisages profit buoyancy resuming by the latter half of 2025, following a high-speed product rollout affecting current margins.
CEO Jensen Huang highlighted how innovations in AI model architecture, especially from rising entities like China’s DeepSeek, will augment demand for Nvidia chips. This aligns with the company’s successful Blackwell AI production ramp-up amidst robust demand.
Despite Nvidia’s soaring performance metrics, uncertainties like potential U.S. government tariffs linger as future considerations.
The share price of Nvidia dropped 1.49% in an after-hour trading after the report of its 4Q24 earnings.
