Nvidia Earnings: Shares Surge on Booming AI Revenues

Wide-moat
Nvidia
(NVDA)
reported
another
quarter
of
outstanding
revenue
and
earnings
while
providing
investors
with
a
forecast
for
the
April
quarter
that
was
well
ahead
of
our
expectations.
Leading
cloud
computing
companies
plan
to
boost
their
capital
expenditures
to
satisfy
demand
for
artificial
intelligence
training
and
inference,
and
it
appears
that
virtually
all
this
spending
will
fall
into
Nvidia’s
pockets.
More
importantly,
we
anticipate
healthy
growth
for
Nvidia’s
data
centre
revenue
beyond
2024,
as
Nvidia’s
Cuda
software
should
contribute
to
strong
customer
stickiness
for
existing
AI
models
and
workloads.

We
raise
our
fair
value
estimate
for
Nvidia
to
$730
from
$480
as
we
boost
our
near-term
and
long-term
revenue
and
profitability
assumptions,
thanks
to
the
tremendous
rise
in
AI
computing
demand.
We
reiterate
our
Very
High
Uncertainty
Rating,
as
the
competitive
landscape
in
AI
seems
to
be
changing
almost
weekly.

Nvidia’s
total
revenue
in
the
January
quarter
was
$22.1
billion,
up
22%
sequentially,
up
265%
year
over
year,
and
ahead
of
guidance
of
$20
billion.
Data
centre
remains
the
only
segment
that
should
matter
to
investors.
DC
revenue
of
$18.4
billion
was
up
27%
sequentially
as
more
graphics
processor
packaging
supply
came
online
and
was
up
409%
year
on
year
and
exceeded
the
$15.0
billion
Nvidia
earned
in
the
DC
segment
all
of
last
year.

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