NVIDIA Posts 769% Annual Profit Growth In Q4- Shares Soar By 10%

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Ahead of its crucial earnings release, widely expected to set the tone for the broader technology stock sector as well as artificial intelligence, investors were wary of NVIDIA Corporation, as reflected by small share price drops. However, the firm’s earnings report for the fourth quarter has proven once again why it’s rightly called the darling of AI. NVIDIA’s latest earnings release saw the firm report $22 billion in revenue and $5.16 in diluted non GAAP earnings per share. Heading into the release, analysts were expecting the firm to post $20.6 billion in revenue and $4.64 in EPS, ensuring that the release managed to surpass even the most optimistic of investors that have driven NVIDA’s stock to post double digit percentage share price gains this year.

NVIDIA’s Shares Show No Signs of Stopping In Aftermarket Following Yet Another Earnings Beat

NVIDIA’s latest quarterly results ensured that the explosive growth trajectory that the firm has paced itself on since the start of last year remains on track. While its revenue and EPS beats are impressive by themselves, the fourth quarter results also saw NVIDIA post a whopping 769% growth in its bottom line profit as the firm raked in $12.3 billion in GAAP net income during the period.

The quarter was the third consecutive quarter that saw NVIDIA beat its own record profit and revenue. Breaking down the earnings report segment wise, NVIDIA’s new bread and butter businesses division, i.e., Data Center, was the clear driver of the growth. NVIDIA’s Data Center revenue during its Q4 FY 2024 sat at $18.4 billion, or in an entirely new category compared to its year ago quarter’s revenue of $3.6 billion.

This marks a 409% annual growth, and NVIDIA’s second fastest growing business division during the quarter was Professional Visualization, which posted a 105% annual growth.

Image: NVIDIA Corporation

Yet, while NVIDIA’s blockbuster results sent the stock soaring in the aftermarket, its iconic Gaming division nevertheless left much to be desired. While Gaming sales grew by a cool $1 billion or 56% annually, sequentially, the figures were flat. According to NVIDIA, Gaming revenue grew during the quarter due to “higher sell-in to partners following the normalization of channel inventory levels and growing demand.”

A sluggish consumer GPU market that has seen retailers struggle to clear inventory has been the biggest woe that NVIDIA has faced for years, and it dented the firm’s income statement heavily in 2022 before the current AI wave ensured that Data Center continues to capitalize on the trillion dollar market that NVIDIA chief Jensen Huang has assured investors multiple times is his firm’s for the taking.

As for the explosive Data Center growth, NVIDIA’s CFO shared that more than half of Data Center revenue during the fourth quarter came from large cloud providers and was driven by NVIDIA’s Hopper GPU being “used for the training and inference of large language models, recommendation engines, and generative AI applications.

The analyst beat was across the board as not only did NVIDIA surpass estimates for Q4, but its guidance for the ongoing quarter was also impressive. According to the company, it can earn as much as $24 billion in revenue in Q1, higher than the analyst estimates of $22.2 billion.

Wall Street was left nothing but impressed, as less than an hour after the results were revealed and on the heels of the analyst conference, NVIDIA’s shares were up by 10% in aftermarket trading.

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