Nvidia (NAS100: NVDA) released its fourth quarter earnings after the market close on Wednesday, and the first reaction was a modest 1% gain in after-hours trading.
NVDA – Daily Chart
The price of NVDA closed at $195.56 and was trading around $199.00 in post-market trading. That move could gain further traction on Thursday in the US, keeping the stock above its previous highs and potentially driving further gains.
Although Nvidia’s blockbuster beats are over for now, it is still a relief for tech stocks that they are producing good results. Investors were looking to Nvidia’s results to gauge whether the hundreds of billions of dollars that Big Tech is pouring into data centre infrastructure are paying off for the firm.
“Our customers are racing to invest in AI compute, the factories powering the AI industrial revolution and their future growth,” CEO Jensen Huang said in a statement.
Wall Street has been betting on signs of robust demand for Nvidia’s top-of-the-line AI chips, driven by large capital expenditures from the largest US companies.
But there are risks to Nvidia’s long-held dominance in AI chips, as smaller rival AMD is set to unveil a new flagship AI server later this year. The company has already signed deals with Nvidia’s top customers, including Meta.
Meanwhile, Google has emerged as a rival with a deal to provide Anthropic with its in-house chips.
Big Tech is increasingly turning inward in the quest for more computing power, dedicating resources to designing in-house chips that they are deploying in their data centres.
Nvidia reported sales of $68.13 billion, beating estimates of $66.21 billion, according to LSEG. The company said adjusted earnings per share came in at $1.62, above estimates of $1.53.
Management expects fiscal first-quarter sales of $78 billion, plus or minus 2%, compared with the analyst average estimate of $72.60 billion.
Nvidia’s earnings should be enough to see stocks in a positive mood ahead of the weekend.
