Nvidia's results for the fourth fiscal quarter outdid what analysts had predicted in terms of revenue and income. The increasing need for Nvidia's graphics processing units, due to the rise in generative AI, has created a shortage of supply. Additionally, Nvidia let known the GH200 GPU during the same period.
Nvidia shares dropped 1% in after-hours trading on Tuesday after the company revealed its fiscal third-quarter results, which exceeded Wall Street's expectations. But the chipmaker warned of a negative effect in the coming quarter due to restrictions on exports to organizations in China and other nations. Colette Kress, Nvidia's finance chief, said in a letter to shareholders that sales to these nations will "decline significantly" in the fourth quarter of fiscal 2024, yet she believes this slump will be offset by impressive growth in other areas. During the analyst conference call, Kress said Nvidia is actively working to obtain U.S. government licenses for sales of high-performance products to customers in the Middle East and China. Nvidia is also attempting to make new data center products that abide by government policies and wouldn't require a license, yet Kress isn't certain these will make an impact in the fourth quarter.
By comparing the consensus among analysts surveyed by LSEG (formerly Refinitiv), Nvidia's earnings were $4.02 per share, adjusted, in contrast to the predicted $3.37 per share, while revenue was $18.12 billion, as opposed to the anticipated $16.18 billion. The company's revenue soared an extraordinary 206% year-on-year in the quarter ending Oct. 29, plus net income was $9.24 billion, or $3.71 per share, increased from the year-ago quarter's $680 million, or 27 cents per share.
Data center revenue totaled $14.51 billion, a substantial 279% improvement, and far more than the StreetAccount consensus of $12.97 billion. Half of this revenue originated from cloud infrastructure providers, such as Amazon, as well as consumer internet entities and large corporations. For guidance, Nvidia predicted $20 billion in revenue for the fourth quarter, implying 231% revenue growth.
In the gaming segment, $2.86 billion was earned, representing an 81% rise and exceeding the $2.68 billion StreetAccount consensus. Moreover, Nvidia introduced its GH200 GPU, which includes more memory than the current H100 and an added Arm processor, and Iris Energy, a bitcoin mining data center company, purchased 248 H100s for approximately $40,000 each.
Moreover, because of the OpenAI chatbot ChatGPT launch by Microsoft-supported startup in 2022, many organizations sought ways to incorporate similar generative AI capabilities to their software, leading to increased demand for Nvidia's GPUs. Nevertheless, the company faces challenges, like AMD competition and diminished sales from the Chinese export constraints. Nonetheless, prior to Tuesday's report, a few analysts remained hopeful, citing GPU demand outpacing capacity as Gen AI adoption extends across various industries, and expecting Nvidia to retain more than 85% share of the Gen AI accelerator market in 2024.
Despite the obstructions, Nvidia stock has risen 241% this year, far outperforming the S&P 500's 18% rise.
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