(BFM Bourse) – The graphics processor specialist delivered its first quarter results as well as its forecasts for the current quarter, shattering analysts’ estimates. Nvidia has once again succeeded with flying colors in its meeting with the market… The title even exceeded $1,000 in post-closing trading on Wall Street.
After the spectacular surge in Nvidia shares (+92% since January 1), the markets awaited, not without a touch of anxiety, the copy of the now third largest capitalization in the world.
This is what analysts at Deutsche Bank describe. Quoted by AFP, they note that Nvidia’s latest publications have often been followed by “significant movements on the stock market”. “In February, the S&P 500 jumped 2.11% the next day, marking its strongest daily increase in more than a year,” they recall.
The American semiconductor giant simply had no room for error, as the results of the mega-capitalization were going to be scrutinized down to the smallest comma…
This is because the American group has accustomed investors to outperforming the market consensus, the group being driven by the rise of generative artificial intelligence (AI) at the heart of conversational robots, such as ChatGPT. The verdict therefore fell on Wednesday evening after the close of the American markets. There is no shortage of superlatives to describe Nvidia’s excellent publication. The graphics chip giant once again wowed investors with better-than-expected quarterly results.
Stratospheric income
So much so that Nvidia once again allowed itself to steal the spotlight from the American Federal Reserve, which also published the minutes of its last monetary policy meeting on Wednesday evening.
Nvidia dominates the market for graphics chips essential for generating advanced artificial intelligence tasks and applications. Microsoft and Google are therefore equipping themselves with thousands or even tens of thousands of Nvidia A100 graphics processors (GPUs) in their data centers to develop and train their conversational robots, ChatGPT and Bard respectively.
In the first quarter (ended at the end of April 2024), Nvidia once again repeated the feat of exploding analysts’ expectations by revealing revenues of $26 billion, compared to $7.19 billion in revenues generated during the same period. last year. The increase is therefore dizzying, since its sales have simply tripled over one year.
And yet, expectations were already very high, with analysts’ consensus targeting a turnover close to $25 billion over the period.
A major focus of the market is data center revenues, which represented 87% of the group’s overall revenues. For this segment, Nvidia saw its turnover soar by 427% year-on-year, to a record level of $22.6 billion. Here too, Nvidia exceeded the expectations of analysts who were counting on $21 billion in this segment.
“Growth in (our) data center business has been fueled by strong and growing demand for generative AI training and inference on the Hopper platform,” said Jensen Huang, founder and CEO of Nvidia . “Beyond cloud service providers, generative AI has expanded to consumer internet companies, enterprise, sovereign AI, automotive and healthcare customers, creating multiple multi-billion dollar verticals,” he said.
During its first financial quarter, Nvidia also posted a net profit of $14.9 billion, reflecting profits that more than sevenfold compared to the $2.04 billion reported a year earlier.
And in terms of adjusted earnings per share, an indicator closely followed by investors, here too Nvidia atomizes the consensus. This indicator stands at $6.12 where analysts’ expectations were at $5.65.
“The next industrial revolution has begun,” said Jensen Huang. “AI will enable productivity gains in almost all industries and help companies reduce their costs and energy consumption,” he added.
“Positive Forecasts” with Blackwell
Nvidia is therefore starting this year with stratospheric performance. And the American giant does not intend to stop there. The company says it’s ready for “a new wave of growth,” thanks to its new Blackwell chips. This new graphics card, described as “the most powerful in the world”, can process generative AI workflows with a cost and power consumption divided by 25 compared to the previous generation of graphics cards.
Nvidia’s forecasts for the second quarter of 2024 (ending in July) once again outperform the consensus, with the company anticipating revenue of $28 billion, a little more than the $26.6 billion expected. by analysts. The forecast revealed by Nvidia is understood with a margin of error of plus or minus 2%.
Which implies growth, once again dizzying, of 171% compared to the 10.32 billion dollars of the second quarter of the previous year. Nvidia also expects an adjusted gross margin for the second quarter of 75.5%, a target that is roughly 50 basis points (0.5 percentage points).
“The concerns that some investors had about a short-term downturn seem to have evaporated with these positive forecasts,” reacted Lucas Keh, analyst at Third Bridge quoted by AFP.
1,000 dollars per share
The markets will not shy away from their pleasure in tasting these exceptional results. On Wall Street, Nvidia shares gained 6.1% to $1,007 after these announcements on Wednesday evening, in after-market trading.
Market observers for their part anticipated a movement of 8.7% in one direction or the other following the publication of Nvidia’s results, according to data from the options analysis company Trade Alert cited by Reuters.
If this post-market variation were to be confirmed at the opening this Thursday on Wall Street, this would represent a gain equivalent to the stock market weight of Intel (140.3 billion dollars) or Schneider Electric (143.43 billion dollars). ) based on a market capitalization of $2.335 billion, according to data from Companiesmarketcap.com.
Above all, the group would confirm its foray beyond the symbolic milestone of $1,000 per share for the first time in its history. Moreover, alongside its annual results, Nvidia announced a division by ten of its shares with a view to making its title “more accessible to employees and investors”.
Nvidia’s results are restoring energy to the European semiconductor compartment, with ASML gaining 3.4% in Amsterdam, or STMicroelectronics increasing 1% in Paris.
European markets also appreciate the publication, putting aside for the moment the less accommodating tone of the Federal Reserve in its monetary policy report. The CAC 40 gained 0.34%, back on 8,100 points at 8,120.46 points this Thursday morning. On Wall Street, pre-opening indicators suggest an opening up 0.8% for the Nasdaq index at 18,937.75 points.
Sabrina Sadgui – ©2024 BFM Bourse
