NVIDIA SURGES AS QUARTERLY NET PROFIT JUMPS A STAGGERING 769%

▶ US chip company’s net income in 2024 fiscal fourth quarter reaches $12.3bn on the back of global AI boom

Shares of Nvidia rallied in after-hours trading on Wednesday as the company reported a nearly 769 per cent surge in its last-quarter net profit and issued a bullish guidance.

The company’s quarterly profit shot up on the back of increased demand for its graphics processing units, which are central to the surge in artificial intelligence boom.

The company’s net profit in the 2024 fiscal fourth quarter that ended on January 28 jumped to about $12.3 billion, from $1.4 billion in the same period a year earlier, Nvidia said. It was up 33 per cent on a quarterly basis. Earnings per share jumped to $4.93, from 57 cents in the same period last year, while revenue soared more than 265 per cent annually to $22.1 billion, exceeding analysts’ expectations of more than $20.6 billion.

It was the company’s third consecutive quarter with more than $10 billion in revenue.

Nvidia’s stock jumped more than 9.4 per cent in after-hours trading to almost $735.74 a share after closing 2.9 per cent down at market close on Wednesday.

The Nasdaq-listed company’s share price is up more than 40 per cent so far this year.

Nvidia’s market value reached $1.67 trillion at the close of trading on Wednesday, positioning it with Apple, Microsoft, Amazon and Alphabet – all of which have a 13-figure market cap.

The company’s market cap reached nearly $1.8 trillion last week, surpassing Alphabet and Amazon. It is currently behind only Microsoft and Apple. “Nvidia is certainly not trading at bubble levels,” Thomas Monteiro, senior analyst at Investing.com, told The National.

“Despite the impressive bull run from the last two years, profitability and margins have followed even faster than we would have expected.”

Nvidia’s 2024 full fiscal year net profit surged 581 per cent to $29.8 billion while its revenue increased 126 per cent to more than $60.9 billion during the period.

Nvidia’s founder and chief executive Jensen Huang said conditions remained “excellent for continued growth [in 2025 and beyond]”.

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” he said.

The California-based company is now forecasting first-quarter revenue of about $24 billion, compared with the $22.17 billion forecast by analysts.

“The year ahead will bring major new product cycles with exceptional innovations to help propel our industry forward,” Mr Huang said.

Nvidia’s strong performance in the last quarter was primarily driven by its data centre business that manufactures A100 and H100 AI chips, used to build and run generative AI technologies such as ChatGPT.

The division’s fourth-quarter revenue stood at a record $18.4 billion, up 27 per cent on a quarterly basis and 409 per cent annually. Full-year revenue rose 217 per cent to a record $47.5 billion.

The company’s gaming unit added nearly $2.9 billion in the November-January period, up 56 per cent from the same quarter a year ago. Full-year revenue jumped 15 per cent to $10.4 billion.

Nvidia’s professional visualisation and automotive units added $463 million (up 105 per cent) and $281 million (down 4 per cent), respectively, in the previous quarter.

The company said it would pay its next quarterly cash dividend of $0.04 per share on March 27 to all shareholders of record on March 6.

The market was poised to “sell the news” following Nvidia’s earnings, given the skyhigh expectations and deteriorating macro conditions, Mr Monteiro said.

“Once again, the company left no doubt that the AI boom is much more than just a stock market narrative,” he added.

Nvidia, which went public in 1999, has established itself as a “trailblazer in the AI hardware domain”, Hong Kong-based Counterpoint Research said in a note. It predicts Nvidia’s AI product revenue to expand by 78 per cent yearly to reach $49.8 billion in 2024.

Revenue rose more than 265 per cent annually to $22.1bn, exceeding analysts’ expectations of more than $20.6bn