Nvidia, the leading producer of advanced AI chips, has reported a remarkable 265% year-over-year increase in fourth-quarter revenue, signaling that the AI boom continues to gain momentum. Jensen Huang, the company's founder and CEO, stated, “Accelerated computing and generative AI have reached a tipping point. Demand is surging globally across businesses, industries, and countries.”
In financial terms, Nvidia achieved $22.1 billion in revenue for the quarter and $60.9 billion for the entire year, reflecting a 126% increase. Their net income skyrocketed by 769% to $12.3 billion for the quarter, translating to $4.93 per diluted share. Over the full year, net income rose by 581% to $29.8 billion, or $11.93 per diluted share. Additionally, Nvidia outperformed Wall Street predictions for both revenue and earnings.
Following this impressive performance, Nvidia's shares surged by 16.4% to $785.38 in a single day, adding an astonishing $277 billion to the company's market valuation. According to Bloomberg, this marks the largest single-session increase ever recorded in stock market history. Nvidia's market capitalization now stands at an impressive $1.94 trillion, surpassing tech giants Google ($1.8 trillion) and Amazon ($1.81 trillion) and positioning Nvidia just behind Apple ($2.85 trillion) and Microsoft ($3.06 trillion) as one of the most valuable companies in the U.S.
This impressive stock climb also boosted Huang's net worth by $9.6 billion, placing him as the 21st richest individual globally, just behind the Walton family of Walmart fame.
In light of Nvidia's stellar quarterly performance, BofA Global Research analysts have raised their price target for Nvidia stock from $800 to $925. They highlighted a vital data point from Nvidia's earnings call: AI inference constitutes nearly 40% of the AI computing mix. Analysts noted that AI inference is closely linked with revenue-generating AI, which is becoming increasingly competitive, contrasting with AI training, where Nvidia currently holds a dominant position.
Nvidia’s journey began with the invention of the graphics processing unit (GPU) in 1999, designed to enhance gaming graphics. Over time, these GPUs have evolved to meet the high computational demands of AI, resulting in overwhelming demand and an ongoing semiconductor shortage. Today, Nvidia dominates over 80% of the advanced AI chip market.
During the earnings call, Huang introduced the Nvidia AI as a service initiative, a platform hosted by major cloud service providers. This service allows clients to access Nvidia's powerful supercomputer, DGX, along with its acceleration library software and pre-trained AI models. Huang emphasized that the DGX could be accessed using a standard web browser, and it is currently available through Oracle Cloud, Microsoft Azure, and Google Cloud, with more providers expected to join.
“Enterprises across nearly every industry are mobilizing to leverage generative AI to transform their products and business models. The level of activity surrounding AI, which was already significant, has accelerated dramatically,” Huang remarked. “This moment is what we’ve been preparing for over the last decade, and we are ready to capitalize on this opportunity.”
This combination of groundbreaking technology, soaring market growth, and innovative services positions Nvidia at the forefront of the AI revolution, ready to lead businesses into a transformed future.
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