Nvidia Corp once again smashed expectations in Wednesday’s annual earnings call with another artificial intelligence-led revenue and earnings beat.
According to analysts by Wedbush Securities, Nvidia not only exceeded quarterly estimates but also provided an optimistic outlook for the first quarter, signalling continued growth momentum.
Data centre revenues, which encompass sales of Nvidia’s cutting-edge AI-focused chip designs, surged a whopping 409% year on year, with forward guidance implying “solid growth.. fueled by the velocity of Nvidia's data centre business”, according to the broker.
Wedbush did warn on inventory levels though.
“One potential point of caution is management's indication that supply is improving in contrast with recent quarters where management explicitly talked to demand exceeding product availability.
“Moving from shortages to adequate supply is always a dangerous shift as backlog necessarily gets worked down meaning shipments outstrip true demand.”
Nonetheless, the upcoming release of Nvidia’s next-generation H200 data centre processor should see demand continue comfortably into the second quarter of the financial year.
Wedbush sees first-quarter firm-wide revenues matching Nvidia’s internal guidance of $24 billion, with full-year revenues surging over 65% to $104.1 billion, with earnings per share adding 76% to $23.07.
As such, Wedbush has reiterated its outperform rating on Nvidia stock, raising the price target from $800 to $850.
Shares are predicted to open 12.5% higher at 674.72 when markets open on Thursday.