NVIDIA CEO Jensen Huang attended a media roundtable in Singapore on December 6, 2023.
Edgar Hsu | Reuters
Nvidia is scheduled to report its fourth quarter results after the bell on Wednesday, a long-awaited report that will give Wall Street an idea of how long the AI boom will last.
Nvidia has been a major beneficiary of the technology industry's recent enthusiasm for large-scale artificial intelligence models developed on its expensive server graphics processors.
Nvidia's stock price has soared nearly fivefold since the end of 2022, giving the company a market capitalization of $1.72 trillion, briefly surpassing tech giants Amazon and Alphabet.
Nvidia must meet rising expectations driven by investor appetite for AI companies.
Analysts expect Nvidia's revenue to increase 240% year over year, totaling $20.6 billion. This was driven by $17.06 billion in data center revenue selling AI GPUs such as the H100. Net profit for the January quarter is expected to jump more than seven times to $10.5 billion.
Investors want to hear from NVIDIA CEO Jensen Huang about how long these stratospheric growth rates will continue. One of his concerns is that many of his GPUs from Nvidia are sold to big tech companies like Microsoft, Amazon, Meta, and Google.
While these companies have reported earnings in recent weeks and signaled their intention to continue investing in new GPUs in the short term, some analysts believe the long-term picture for demand will become more complex. I think it's possible.
“They call their purchasing 'flexible' and 'demand-driven,' and expect to scale back once they get through the current hype cycle,” DA Davidson analyst Gil Luria said in a recent note to investors. “I am hinting that I will.” “I don't think we're there yet, but we may be seeing early signs.”
Nvidia also plans to begin shipping a new top-of-the-line server GPU called the B100 in 2024. The timing of its chip launches could impact the company's growth rate.
Wall Street analysts expect sales to grow 208% this quarter to about $22.17 billion.
Nvidia also has other businesses, from PC gaming chips to automotive chips. But Wednesday's focus will likely remain largely on Nvidia's AI GPUs, which account for more than 80% of its revenue.
” [data center] “GPU numbers will likely be the only key metric that matters, along with comments on broader market adoption,” Barclays analyst Thomas O'Malley wrote in a note earlier this month.
