Santa Clara, California – Nvidia delivered yet another set of impressive financial results, surpassing Wall Street expectations with its latest earnings report. The chip designer and artificial intelligence leader saw its stock surge towards a record high following the announcement.
In the three-month period ending April 30, Nvidia reported earnings per share of $6.12 and sales of $26 billion, exceeding analysts’ forecasts of $5.60 and $24.59 billion, respectively. The company’s profits and revenues experienced staggering growth rates of 628% and 268% compared to the same period in the previous year. This quarter marked Nvidia’s most profitable and highest sales quarter ever, surpassing the previous record set earlier in the year.
The remarkable financial performance was primarily attributed to Nvidia’s AI-intensive datacenter division, which generated $22.6 billion in revenue last quarter, representing a 427% increase year-over-year. The segment’s revenue was a remarkable 20 times higher than what it brought in back in 2020. As a result of the positive earnings report, Nvidia’s stock saw a 4% increase, nearing an all-time high of $1,000 per share.
Analysts had anticipated high volatility in Nvidia’s stock following its earnings report, with options trading indicating an expected 8% movement in either direction. Nvidia’s role in the AI technology sector, with major customers like Amazon and Microsoft, has positioned it as a key player in the industry. Despite a slight slowdown in growth compared to previous quarters, analysts remain optimistic about Nvidia’s future outlook, projecting a 90% revenue expansion for the fiscal year ending in Jan. 2025.
Nvidia’s remarkable rise has had a significant impact on the American stock market, leading the way to record market levels. The company’s total return of 490% over the last 18 months far exceeds the average return of S&P 500 stocks during the same period. Despite the steep increase in valuation, analysts do not consider Nvidia to be overvalued, with an average price target of $1,039 per share.
A notable shift in Nvidia’s business strategy has seen a move away from its traditional gaming unit, which has experienced a decline in sales over the past two years. The company has shifted its focus towards supplying AI-focused GPUs to large corporate clients, moving away from direct-to-consumer GPU sales targeted at gamers.
Nvidia’s success story continues to unfold, with the company’s innovative approach to AI technology and datacenter solutions driving its impressive financial performance. Investors and analysts alike are closely monitoring Nvidia’s growth trajectory, anticipating further milestones and achievements in the coming years.