Nvidia (NVDA) Q4 2024 Earnings Report

Nvidia is scheduled to announce fiscal fourth-quarter earnings after the bell on Wednesday in a much-anticipated report that will give Wall Street a sense of how long the AI ​​boom can last.

Nvidia has been the main beneficiary of the tech industry’s recent craze for big AI models that are built on the company’s expensive server GPUs.

Nvidia’s share price has jumped nearly fivefold since the end of 2022, giving the company a market value of $1.72 trillion, briefly surpassing the tech giants Amazon and Alphabet.

Nvidia must meet inflated expectations fueled by investor appetite for AI companies.

Analysts expect Nvidia to post a 240% year-over-year increase in revenue to total $20.6 billion, led by $17.06 billion in data center revenue — the business that sells AI GPUs like the H100. Net income is projected to grow more than sevenfold to $10.5 billion in January.

Investors want to hear from Nvidia CEO Jensen Huang about how long these stratospheric growth rates can last. One concern is that many of Nvidia’s GPUs are sold to large technology companies such as Microsoftamazon, Meta and Google.

Those companies have reported earnings in recent weeks and signaled they will continue to invest in new GPUs in the near term, but some analysts believe the long-term demand picture could be more mixed.

“They have described their purchases as ‘flexible’ and ‘demand driven,’ meaning they will reduce them if we go through the current ad cycle,” DA Davidson analyst Gil Luria wrote in a recent note to investors. “While we don’t believe we’re there yet, we’re seeing possible early signs.”

Nvidia also plans to start shipping a new high-end server GPU called the B100 in 2024. The timing of that chip could affect the company’s growth rate.

In the current quarter, Wall Street analysts expect a 208% increase to about $22.17 billion in sales.

Nvidia also has other businesses, from computer gaming chips to automotive chips. But Wednesday’s focus will remain largely on AI GPUs, which make up more than 80 percent of Nvidia’s sales.

“The [data center] The GPU number will be the only key metric that matters along with commentary on broader market adoption,” Barclays analyst Thomas O’Malley wrote in a note earlier this month.