NVIDIA earnings blow past estimates, mark ‘tipping point’ for AI

Shares of Nvidia (NASDAQ: NVDA ) rose from $674.72 to $728.35 in mid-afternoon trading, following the company's better-than-expected fourth-quarter earnings report — a strong boost to artificial intelligence growth.

The hardware maker reported revenue of $22.1 billion—for the fourth quarter ending Jan. 28, 2024—up 22 percent from the previous quarter and up 265 percent from a year earlier. Market watchers were expecting a 208 percent gain ahead of the earnings report, according to Reuters.

“Accelerated computing and generative AI has reached its peak,” said Jensen Huang, founder and CEO of NVIDIA, in the report. “Demand is increasing across companies, industries and countries around the world.”

Following Nvidia's earnings news, other AI-related stocks rose, including Super Microcomputer up 6%, Advanced Micro Devices up 3%, and chipmaker Broadcom up 2%, according to Reuters.

Shares of Google parent company Alphabet ( NASDAQ:GOOGL ) rose 0.98 percent to $143.95 in after hours, while Microsoft ( NASDAQ: MSFT ) rose 0.65 percent in afternoon trading.

AI-related tokens and memecoins were also swept amid a strong corporate showing, with prices rising after Nvidia's report.

The Fetch.Ai token FET is currently trading at $1.13, up 3.49%. The SingularityNET AGIX token traded at $0.66, up 13.30%, and Optimus AI OPTI at $0.32, up 0.70% in the last hour, according to CoinMarketCap.

Sora Token, inspired by but unrelated to OpenAI's buzzy new AI video generator, also rose 9.22% to $0.00000368 in the last hour.

Last year, Nvidia reported total revenue of $13.5 billion in the second quarter of its fiscal year, a 101 percent increase compared to the same quarter in 2022.

“A new era of computing has begun,” NVIDIA founder and CEO Jensen Huang said at the time. “Companies around the world are moving from general purpose to accelerated computing and generative AI.”

Contributing to the record earnings report, Navidi said, is increased demand for generative AI, rapid data processing, training and cloud service providers, enterprise software firms and consumer internet companies.

Nvidia's hardware division has seen an increase in AI as developers turn to the company's GPUs to power their projects.

“NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators,” Huang said. “The first year will bring new product cycles with unique innovations that will help move our industry forward.”

That high demand has been somewhat tempered by current geopolitical tensions between China and the United States. Navia has released a tweaked version of its RTX 4090 GPU, the RTX 4090D, to ship to the Chinese markets.

It said data center revenue was $18.4 billion in the quarter, up 409 percent from last year.

In the gaming sector, Nvidia said annual revenue grew 15 percent to $10.4 billion, thanks to the company's launch of its Avatar Cloud Engine last year with GeForce RTX 40 Super Series GPUs, customizable chatbots and microservices.

In May, during the annual Computex trade show, Nvidia demonstrated its Avatar Cloud Engine (ACE) for next-generation games. The detail of the ACE demo showed a cyberpunk-style restaurant and an NPC behind the bar that Huang can understand and interact with players “in a logical way”.

“This is the future of video games,” NVIDIA CEO Jensen Huang told the audience. “Not only does the AI ​​contribute to the rendering and integration of the environment, but the AI ​​also animates the characters.”

Edited by Ryan Ozawa.