Nvidia significantly exceeded expectations in Q4, reporting revenue of $68.1 billion compared to the anticipated $65.9 billion
Nvidia surpassed expectations with an impressive Q4 performance, reporting revenue of $68.1 billion compared to the forecasted $65.9 billion. Their earnings per share reached $1.62 versus the anticipated $1.53, and the company's guidance exceeded market projections. Despite these strong results, Nvidia's shares dipped in after-hours trading.
Initially, the stock rallied above $200, fueled by robust demand for Blackwell products and CEO Jensen Huang's remarks on the "exponential" growth potential of AI. However, the initial excitement waned over the course of the earnings call.
From a technical perspective, the overall uptrend remains intact despite a slowdown in momentum. Resistance levels are seen near previous peaks around $212, while support is identified near $170. Nvidia's fundamental performance is undeniably strong, but trading action has grown more cautious.
Nvidia delivers a stellar Q4 performance, but markets had higher expectations
What happened:-
The semiconductor giant delivered results that exceeded market expectations, showcasing robust sales and earnings for the quarter. Despite this strong performance, the stock did not experience the same level of investor enthusiasm as seen after prior earnings releases, even though Nvidia provided an optimistic revenue forecast.
How were the results:-
In detail, the company recorded impressive double-digit revenue growth for the quarter. Revenue surged 73% year-over-year, reaching $68.13 billion, surpassing analysts' consensus estimate of $66.0 billion. Additionally, earnings per share came in at $1.62, outperforming Wall Street's projection of $1.53 per share.
Nvidia earnings recap: Stock rises after earnings blow past Wall Street estimates
Why it matters:-
Revenues from Nvidia's gaming segment, once its largest division, rose 47% year-on-year to $3.7 billion but saw a 13% decline compared to the previous quarter. Despite this, Nvidia announced that it has secured sufficient inventory and production capacity to meet demand for upcoming quarters, although supply constraints may continue to affect the gaming sector.
Meanwhile, the company's data center revenues surged 75% year-on-year, reaching $62.3 billion for the quarter and surpassing market expectations of $60.69 billion. This growth highlights a significant shift in focus, with over 91% of Nvidia's total sales now originating from the data center segment.
CEO Jensen Huang emphasized the rapid expansion in computing demand, noting that the pivotal moment for agentic AI is now upon us.
Looking ahead, Nvidia forecasted first-quarter revenues between $76.44 billion and $79.56 billion, comfortably exceeding market predictions of $71.96 billion. They also projected non-GAAP gross margins of 75%, with a 50 basis point variation.
The forecast excludes any potential data center revenues from China. However, Nvidia confirmed it has received approval from the US government to supply H200 chips in limited quantities to its Chinese customers.
Nvidia's Q4 results
How shares reacted:-
Nvidia's stock edged up by 0.2% to $195.92 during extended trading on Wednesday after the company released its quarterly earnings. This modest gain follows a period where investors had grown accustomed to Nvidia exceeding revenue expectations for 14 consecutive quarters.
Looking ahead:-
Investors will closely monitor the intensifying competition Nvidia faces in the AI chipmaking sector, which could threaten its dominant position. AMD is preparing to launch a new flagship AI server this year, coupled with partnerships with some of Nvidia's key clients. Additionally, Alphabet’s Google is rumored to be negotiating chip supplies with Meta Platforms, presenting another significant challenge to Nvidia's market leadership.