NVIDIA’s CEO Jensen Huang attends a media roundtable assembly in Singapore December 6, 2023.
Edgar Su | Reuters
Nvidia is scheduled to announce fiscal fourth-quarter earnings after the bell Wednesday in a extremely anticipated report that may give Wall Avenue a way of how lengthy the AI growth can final.
Nvidia has been the first beneficiary of the current expertise trade obsession with giant synthetic intelligence fashions, that are developed on the corporate’s expensive graphics processors for servers.
Nvidia’s inventory worth has soared practically fivefold for the reason that finish of 2022, giving the corporate a market worth of $1.72 trillion, briefly surpassing tech giants Amazon and Alphabet.
Nvidia has to satisfy elevated expectations stoked by investor urge for food for AI firms.
Analysts count on Nvidia to publish a 240% enhance in income from the year-ago interval, for a complete of $20.6 billion, pushed by $17.06 billion in knowledge heart income — the enterprise that sells AI GPUs just like the H100. Internet earnings is forecast to surge greater than sevenfold to $10.5 billion within the January quarter.
Buyers need to hear from Nvidia CEO Jensen Huang about how lengthy these stratospheric development charges can final. One concern is that lots of Nvidia’s GPUs are bought to huge tech firms akin to Microsoft, Amazon, Meta and Google.
These firms reported earnings in current weeks and signaled they may proceed to put money into new GPUs within the quick time period, however some analysts assume the long-term image for demand could possibly be extra combined.
“They referred to their buying as ‘versatile’ and ‘demand pushed,’ implying they might scale it down if we received previous the present hype cycle,” D.A. Davidson analyst Gil Luria wrote in a current observe to buyers. “Whereas we don’t consider we’re there but, we’re seeing attainable early indicators.”
Nvidia can also be planning to begin transport a brand new highest-end server GPU referred to as the B100 in 2024. The timing of that chip may have an effect on the corporate’s development fee.
Within the present quarter, Wall Avenue analysts count on a 208% fee of development to about $22.17 billion in gross sales.
Nvidia has different companies, from chips for PC gaming to automotive chips. However the focus Wednesday will stay totally on its AI GPUs, which make up greater than 80% of Nvidia gross sales.
“The [data center] GPU quantity would be the solely key metric that issues together with commentary on broader market adoption,” wrote Barclays analyst Thomas O’Malley in a observe earlier this month.
