By Emily Bary
‘Fundamentally, the conditions are excellent for continued growth’ in coming years, CEO says
Nvidia Corp. cleared a high bar with its latest earnings Wednesday, sending its stock surging more than 8% in the extended session.
The company beat top-line expectations by almost $2 billion for the most recent quarter, while doing the same with its outlook for the current one. Investors, though, have increasingly been focused on Nvidia’s (NVDA) long-term growth potential, and management’s message there also resonated.
While acknowledging that Nvidia doesn’t offer guidance beyond the ongoing quarter, Chief Executive Jensen Huang said on the earnings call that “fundamentally, the conditions are excellent for continued growth” over the next two calendar years “and beyond.”
The company is benefiting as general computing gives way to accelerated computing, and it’s seeing booming interest in generative artificial intelligence. Those areas have “hit the tipping point,” Huang said in Nvidia’s earnings release.
“This new AI infrastructure will open up a whole new world of applications not possible today,” he added on the call. “We started the AI journey with the hyperscale cloud providers and consumer internet companies, and now every industry is on board – from automotive, to healthcare, to financial services, to industrial, to telecom, media and entertainment.”
The chip giant has been seeing frenzied customer spending on AI hardware, and that was on display again Wednesday as the company reported fiscal fourth-quarter results. Revenue came in at $22.1 billion, up from $6.05 billion a year before, while analysts had been modeling $20.4 billion.
Data-center revenue at Nvidia rocketed more than 400% from a year before to hit $18.4 billion, while the FactSet consensus was for $17.06 billion.
Nvidia forecasted continued strong growth for the ongoing quarter, well above expectations. The company is calling for $24.0 billion in revenue at the midpoint, up from $7.2 billion a year prior, while analysts were modeling $22.2 billion. Meanwhile, data-center revenue is expected to grow sequentially.
Nvidia has faced supply constraints in recent quarters, but those are easing, according to Huang. At the same time, however, he expects that “demand will continue to be stronger” than Nvidia’s supply provides throughout the year.
The company posted fiscal fourth-quarter net income of $12.3 billion, or $4.93 a share, compared with $1.4 billion, or 57 cents a share, in the year-earlier period. On an adjusted basis, it earned $5.16 a share, while analysts were projecting $4.59 a share.