Here's How Trading Nvidia Stock Heading Into GTC 2024
Nvidia Corporation stock has seen significant growth due to high demand for its AI chips, which remain supply constrained. Although concerns over the sustainability of Nvidia's valuation and growth expectations have recently increase, industry capex allocation to AI-related infrastructure remains on the rise within the foreseeable future. Nvidia remains well-positioned for further fundamental outperformance, which is supportive of a similar extent of valuation multiple expansion as previously observed leading up to its next earnings release.
Nvidia's FY4Q24 results continued to exceed expectations, with its datacenter business once again beating all expectations. Datacenter revenues grew 27% sequentially, while gaming revenues remained flat and automotive segment grew 8%. Nvidia continues to extend its lead with the scaling up of the H200, the world's most powerful GPU, with enhanced performance and memory capacity.
In the fourth quarter, more than half of Nvidia's data center revenues came from the large cloud providers like AWS, Azure and Google Cloud. 40% of its data center revenue for the last year was for AI inference, which shows end customers are using AI for real world use cases.
Despite Nvidia Corporation’s lofty premium at current levels, we remain bullish on the stock considering its relative trend to the broader peer group. There is also resilient AI momentum in the near term, where demand for supporting processors remains a function of supply availability. This accordingly bodes favorably with Nvidia’s market leadership, and provides further fuel for a potential upsurge towards the $1,000 threshold in the coming months.
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