As noted by the Wall Street Journal, Nvidia's results alleviate concerns about the possibility of an investment bubble around AI. However, with success, the pressure on the company to not only meet but also exceed market expectations increases.
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Daniel Newman, CEO of Futurum Group, emphasized that “Nvidia needs to deliver excellent quarterly results to meet investor demands“.
In turn, the New York Times drew attention to the growing demand for chips produced by the company. Nvidia currently generates over 91 percent. of its revenues from the data center segment, making it a key player in the development of AI infrastructure worldwide.
Impressive numbers and future forecasts
Earnings per share in the fourth quarter were $1.62, beating analysts' forecasts of $1.53. The company's revenues increased by 73%, reaching USD 68.13 billion, while the market expected a result of USD 66.21 billion.
Nvidia forecasts revenue of $78 billion in the first quarter of the fiscal year, which also exceeds analysts' expectations of $72.6 billion.
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After the results were published, the company's shares rose by approximately 4 percent in over-the-counter trading. Nvidia, as one of the technological leaders, remains the main beneficiary of investments in AI, providing processors, among others. for OpenAI, creator of ChatGPT.
Market domination and challenges for investors
Jed Ellenroek from Argent Capital Management in an interview with Fox Business noted that Nvidia is unique compared to other technology companies.
“It's the largest company in the world and is growing by about 50 percent a year. This kind of growth and size is extremely rare, making investors not quite sure how to take advantage of it” – he said.
Despite Nvidia's success, other leading technology stocks, known as the “magnificent seven,” have reported heavy losses this year.
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The reason is investor concerns about excessive spending on AI development, which, however, largely goes to Nvidia, which is the main supplier of chips for this industry.
