Technology
Tuesday, February 20th, 2024 5:30 pm EDT
Key Points
- Nvidia is set to announce fiscal fourth-quarter earnings as the world’s third most valuable public company, with a soaring stock price and a market capitalization of about $1.8 trillion, trailing only Microsoft and Apple.
- Analysts expect Nvidia’s revenue to surge by 240% to $20.6 billion, with net income likely to increase more than sevenfold to $10.5 billion, driven by significant growth in its data center business, including AI chips.
- Investors are closely watching Nvidia’s performance, particularly in its data center GPU sales and market commentary from CEO Jensen Huang, amid concerns about the sustainability of its growth trajectory and potential challenges in meeting short-term demand and supply dynamics, especially given its reliance on Taiwan Semiconductor Manufacturing Company for chips. Additionally, anticipation surrounds the launch of Nvidia’s newest AI chip, the B100, expected to fuel further growth in the coming years.
Nvidia, poised as the third most valuable public company globally, faces high investor expectations as it prepares to report fiscal fourth-quarter earnings. The company’s stock has surged dramatically, driven by soaring demand for its graphics processing units, particularly those fueling the artificial intelligence (AI) sector. Nvidia’s chips, including the H100, play a pivotal role in developing cutting-edge AI models, such as ChatGPT by OpenAI. With a market cap reaching approximately $1.8 trillion, surpassing tech giants like Alphabet and Amazon, Nvidia trails only Microsoft and Apple in valuation. Analysts note the “parabolic” rise in Nvidia’s stock, attributing it to a blend of fear, greed, and an indiscriminate chase for AI-related investments. All eyes are now on Nvidia as analysts anticipate a staggering 240% increase in revenue to $20.6 billion, driven by robust growth in its data center business, expected to quadruple to $17.06 billion annually. However, concerns linger regarding Nvidia’s reliance on major tech clients like Microsoft, Amazon, Meta, and Google for GPU sales, which could dampen growth if these companies scale back AI hardware investments. While Nvidia’s gaming segment is also expected to grow, albeit at a more moderate pace, analysts are particularly focused on the sustainability of the company’s data center performance and its ability to meet short-term demand amidst supply chain challenges. Additionally, anticipation surrounds the launch of Nvidia’s latest AI chip, the B100, expected to fuel growth in the coming years. Analysts remain cautiously optimistic, emphasizing the importance of Nvidia’s data center GPU performance and market adoption commentary in assessing its future trajectory.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/20/nvidia-faces-stiff-test-in-q4-earnings-after-parabolic-stock-rally.html
