Nvidia sees only marginal gains after better-than-expected results
Nvidia The stock rose 1.3% in premarket trading Thursday; Investors’ concerns about the AI infrastructure boom dampened enthusiasm for better-than-expected earnings.
According to LSEG, fiscal fourth-quarter revenue reached $68.13 billion, above analysts’ estimates of $66.21 billion. Total revenue was up 73% from what Nvidia reported a year ago, and guidance also came in above expectations.
“The debate has shifted from near-term outcomes to the sustainability of AI capex amid concerns about quantum, monetization, and potential cash flow disruption,” Richard Clode, portfolio manager at Janus Henderson Investors, told CNBC via email.
Nvidia shares from last year.
Investor AI concerns
Hyperscalers have seen more than this $1 trillion was wiped from market values in early February before losses in recent weeks were recouped.
Semiconductor AMD fell 17% after a guidance report earlier this month that beat many analysts’ expectations, though some had predicted a stronger outlook.
“The market is currently struggling with broad-based AI concerns,” said Dan Hanbury, Ninety One’s global strategic equity associate portfolio manager.
“What’s most on investors’ minds is how Nvidia can maintain its phenomenal growth rate; right now its core customers (hyperscalers) are mostly eating away at their cash flow and spending on AI-related capex.”
Data centers fuel growth
Its data center unit, which houses Nvidia’s market-leading chips, fueled the revenue boom, delivering 91% of sales.
Data center revenue was $62.3 billion this quarter, above expectations of $60.69 billion, according to StreetAccount.
Nvidia issued an optimistic forecast of $78 billion (plus or minus 2%) in revenue for the fiscal first quarter; This figure is well above analysts’ estimate of $72.6 billion.
“The guidance of $78 billion in revenues was well ahead of the buy-side’s most optimistic expectations and expectations for a fourth consecutive quarter of rising growth, contrary to concerns about a slowdown,” Clode said.
