Nvidia Q4 - Rocketing through expectations

Nvidia's latest quarterly results showcased another top-notch performance, but the market reaction was not great. The shares opened in the green yesterday, but closed down 8.5%.

The chipmaker reported a 78% jump in revenue to $39.3 billion, rocketing through expectations. The data centre division, now its main growth engine, raked in $35.6 billion, a 93% year-on-year increase, as demand for AI computing power remained rock solid. The company also posted $22 billion in net income, an 80% rise from the previous year.

Guidance for the current quarter came in at $43 billion, slightly ahead of consensus estimates of $42.3 billion. Nvidia also revealed that its latest AI chip, Blackwell, generated $11 billion in sales in its first quarter of shipping, marking its fastest-ever product growth story.

Nvidia is still the undisputed leader in AI hardware, and its chips remain the gold standard for large-scale AI workloads. The company is effectively printing money, its data centre unit alone now makes more revenue than Intel and AMD combined.

While the recent market reaction suggests a maturing growth story, it's worth noting that Nvidia beat revenue forecasts by the smallest margin since early 2023, setting a new (and incredibly high) bar for expectations.

Nvidia is not cheap, competition is intensifying, and there's always the risk of AI spending slowing down. However, with Microsoft, Amazon, Meta and Google all committing record sums to AI infrastructure, the runway for Nvidia's growth remains intact. Long-term investors should be buying the dip.