In a striking display of the ongoing demand for chips, Nvidia has once again shattered earnings expectations. Its financial results for the fourth quarter and 2024 fiscal year underscored the company's commanding position in AI and the broader tech industry.

Nvidia creates graphic processors used to develop and run AI models and has been the main beneficiary of the generative AI boom, which began with the release of ChatGPT at the end of 2022. It became the first chipmaker to hit a $1 trillion valuation back in May 2023.

In its latest earnings report the Santa Clara-based chipmaker reported:

  • Record quarterly revenue of $22.1 billion, an astonishing 265% surge from the same period last year!

  • Net income of $12.29 billion for the quarter, up 769%.

  • Full-year revenue also saw an unprecedented increase, reaching $60.9 billion, 126% growth over fiscal 2023!

  • Net income of $29.76 billion, 581% up over fiscal 2023.

Wow, it certainly seems to be raining dollars over at Nvidia!

Regarding the crazy and growing demand for AI products and development, Nvidia CEO Jensen Huang said, “accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.”

Its data center business, which includes the company’s industry leading H100 chips, brought in $18.4 billion during the quarter, up 409% from the same quarter in 2022.

The chip company, founded in 1993 by Jensen Huang, Curtis Priem and Chris Malachowsky has become arguably one of the most important companies in the world thanks to its key position in the development and deployment of AI technology. 

The company now has a market cap of $1.94 trillion making it one of the most valuable companies in the world.

What Does It Mean For The AI Industry?

The AI frenzy shows no signs of slowing down. New products like OpenAI’s new text to video Sora model and Groq (not to be confused with X’s Grok) show, whether for better or worse, just how quickly developments are being made.

Sam Altman announced Sora to the world on X last week. Although still not perfect, it’s both amazing and terrifying just how lifelike the videos it creates can be.

Demand is far exceeding supply however. Supply chain difficulties and geopolitical issues, especially between the U.S. and China are causing problems for the industry.

This might be bad news for the companies wanting to build and develop AI products, but it’s good news for companies, such as Nvidia, that are supplying the GPUs needed to build them. As long as demand continues to far exceed supply, Nvidia can charge a premium for its products.

Huang said on the earnings call that although the U.S government wants to limit the sale of the most advanced GPUs in China, it nevertheless wants to see Nvidia be as successful as possible over there. Regarding sales in China he added, “We're going to do our best to compete in the marketplace and succeed within the specifications of the restriction.

There is no doubt that, up until now, the company has executed brilliantly on its mission to power AI development around the world.

What’s Next For Nvidia?

The excitement around AI has undoubtedly helped many companies but Nvidia is widely seen to be the one that’s benefited the most. Its growth has been extraordinary and its share price is up 277% in the past 12 months and 62% in 2024 alone (as of Thursday close)!

Analysts and investors are worried that the company may not be able to keep up its current level of growth for the whole of 2024. But addressing this issue during the conference call Huang said, “Fundamentally, the conditions are excellent for continued growth in calendar 2024, calendar 25 and beyond.” He certainly doesn’t seem too worried.

Guidance for Nvidia’s for the first quarter of fiscal 2025 was also higher than analysts had expected, with revenue of $24 billion. Its new H200 chips will also be released in Q2 of this year and demand is forecast to be strong - it will be nearly twice as powerful as their current H100 chips, the most powerful on the market today. 

The growth of the AI industry over the last year has been phenomenal and doesn’t seem set to slow down anytime soon. Whether this is good or bad for the world as a whole is a different question but regardless, most believe that Nvidia will likely remain a leader in the field for some time to come.

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