Personal Insights:
1. NVIDIA's fourth-quarter performance exceeded expectations, showcasing remarkable results and strong guidance, bolstered by its leading AI chip technology.
2. The disclosed results highlight continued robust revenue growth and exceptional gross margin performance, contributing to enhanced profitability for NVIDIA.
3. With NVIDIA's rapid ascent from a trillion-dollar market cap to nearing the $2 trillion mark in just a few months, fueled by the ongoing revolution in the global AI industry, the potential for it to become the third $3 trillion company is within reach.
Overall, NVIDIA's performance in the fourth quarter far surpassed expectations, with strong revenue growth and impressive gross margin, further solidifying its leading position in the AI chip sector. As the global AI industry continues to innovate, NVIDIA's market cap has rapidly soared, reflecting ongoing market potential. Looking ahead, NVIDIA's potential to become the third $3 trillion company seems promising.
Financial Analysis: Continued Strong Performance in Q4, AI Chip Technology Exceeds Expectations
Revenue:
In the fourth quarter, NVIDIA achieved a revenue of $22.1 billion, a staggering 265% year-over-year increase, significantly surpassing previous guidance and expectations. The data center business, driven by AI chip contributions, saw substantial revenue growth, with quarterly revenue reaching $18.4 billion, a fourfold increase compared to the same period last year, far exceeding expectations of $17.2 billion.
Profit:
NVIDIA's net profit for the fourth quarter was $12.3 billion, a remarkable 769% year-over-year increase, with earnings per share of $4.93 compared to $0.57 in the previous year. Additionally, adjusted earnings per share for the quarter were $5.16, surpassing analysts' expectations of $4.59. The core of the substantial profit growth lies in NVIDIA's leading position in AI chip technology.
Operational Analysis: AI Chip Advantages Establish Exceeding Gross Margin, Superb Q1 Performance Guidance, Controlled Impact of AI Ban
AI Chip Advantage Establishes Exceeding Gross Margin:
In recent quarters, NVIDIA's performance has been exceptional, largely attributed to its AI chip contributions, which have also demonstrated outstanding gross margin performance. Under robust revenue growth, NVIDIA's gross profit increased significantly, rising nearly 13 basis points to 76%, a remarkable increase.
Operating expenses for the quarter were $3.18 billion, representing only a 23.3% year-over-year increase. With well-controlled costs and expenses, NVIDIA achieved operating income of $13.6 billion for the quarter, a staggering increase compared to the same period last year.
Superb Q1 Performance Guidance:
Following the release of the financial report, NVIDIA's stock price rebounded, not only reversing losses but also further increasing in after-hours trading. This positive market response is mainly due to NVIDIA's outstanding fourth-quarter performance and Q1 performance guidance far exceeding market expectations. NVIDIA forecasts revenue to reach $24 billion in the next quarter, a staggering 234% year-over-year increase, with predicted fluctuations not exceeding 2%. This outlook reflects NVIDIA's strong growth momentum, driven by high demand for its leading AI chips and improved supply chain conditions, unlocking more growth potential.
Controlled Impact of AI Ban:
Compared to the excellent performance and guidance, the challenges stemming from the US AI ban on Chinese exports seem insignificant for NVIDIA. Specifically, revenue from China decreased from the previous 10%-20% to single-digit performance due to export restrictions. NVIDIA's strategy to develop new products to address this issue was reiterated in the current financial report, essentially securing its position.
While the AI ban has indeed somewhat restricted NVIDIA's soaring performance, the latest financial results indicate that overall performance remains within controllable bounds, as NVIDIA's CEO, Jensen Huang, anticipated.
In conclusion, NVIDIA's fourth-quarter fiscal year 2024 performance far exceeded expectations, driven by robust revenue growth and exceptional profitability, underpinned by its leading AI chip technology. Despite challenges posed by the US AI ban, NVIDIA's performance remains strong and its future outlook promising, supported by its continued innovation and market leadership in the AI sector.
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