Against the pressure of four consecutive declines and high stock prices, on February 23rd Beijing time, Nvidia emerged from a wave of upward momentum with positive financial reports. As of the close, Nvidia's stock price rose 16.4% in a single day to reach $785.38 per share, with a total market value of $1.96 trillion, surpassing Amazon, second only to Apple and Microsoft, and ranking third in the US stock market. Its increased market value in one day is close to 2 trillion yuan, which is almost equal to "rising one Kweichow Moutai" in one day, sweeping away the bearish haze of the previous few days.
On February 22, Beijing time, Nvidia released its fourth quarter financial report for the 2024 fiscal year. According to data, the company achieved a revenue of $22.1 billion in the just concluded financial quarter, a year-on-year increase of 265%, and a net profit of $12.285 billion, a year-on-year increase of 769%. Meanwhile, Nvidia's annual revenue also reached a historic high of $60.9 billion, an increase of 126%.
Against the backdrop of Sora's continued surge in AI demand, Nvidia CEO Huang Renxun also stated in a statement after the financial report, "Accelerating computing and generative artificial intelligence have reached a critical point. The demand for this is rapidly increasing among companies, industries, and countries worldwide."
Financial report data exceeded expectations, investors breathed a sigh of relief
For the entire year of 2023, Nvidia's stock price rose by 239%, and since the beginning of 2024, it has maintained a strong increase. This puts Nvidia's total market value on par with Amazon and Google's parent company, Albert. Except for Microsoft and Apple, which are still difficult to shake, Nvidia has firmly established itself as one of the top five companies in the US stock market.
However, the rapid rise also made many investors worried that Nvidia's share price was "too expensive" and there was a foam. As the share price continued to soar, the voice of betting against Nvidia was heard all the time, and reached the highest point a few days before Nvidia's financial report was about to be released.
Before Nvidia released its financial results, the previously soaring stock of Nvidia experienced four consecutive trading days of decline, with the stock price falling below $700 per share. This has caused many Nvidia investors to worry about its performance, but with the emergence of a bright financial report, investors breathed a sigh of relief.
For the company's most recent financial quarter, analysts estimate revenue to be $20.4 billion, with an adjusted earnings per share of $4.59. But according to the actual financial report released, Nvidia's revenue for the most recent quarter reached $22.1 billion, with an adjusted earnings per share of $5.16, both indicators exceeding market expectations.
The market has also responded to this. On February 22, Beijing time, Nvidia rose 9.08% after hours, and its stock price rebounded to $735.58 per share (some exchanges in the United States have provided an extended trading period called the after hours trading period). On February 23, the company even rose sharply at the beginning of trading. Under the support of a 16.4% increase, the market value of Nvidia increased by 273.3 billion dollars in one day, equivalent to 1.97 trillion yuan, close to the total market value of Kweichow Moutai (21.58 trillion yuan).
With this round of gains, Nvidia's total market value has now surpassed Amazon and Albert, ranking third in the US stock market.
According to the financial report, Nvidia's largest revenue source, the data center division, achieved a revenue of $18.4 billion in the fourth quarter, a year-on-year increase of 409%, and higher than analysts' expectations of $17.21 billion. Nvidia stated that the growth in data center revenue is mainly due to the rebound in demand generated by the easing of global economic downturn concerns.
Nvidia CFO Kress stated that in the fourth quarter, data center revenue was mainly driven by generative artificial intelligence and related training, with an estimated 40% of data center revenue coming from artificial intelligence over the past year. He stated during the earnings conference call that the market demand for the company's next-generation products far exceeds supply, especially the new generation chip B100 that the company expects to ship later this year. "Building and deploying AI solutions has touched almost every industry, and it is expected that the scale of data center infrastructure will double within five years."
However, it should be noted that since the US government implemented export control measures, Nvidia's data center revenue in the Chinese market has begun to decline significantly. "So far, we have not obtained a license from the US government to ship restricted goods to China, but we have started shipping alternative products that do not require a license to the Chinese market.". Nvidia CEO Huang Renxun said.
Under the popularity of Sora as an AI "shovel seller", Nvidia is expected to continue to benefit
As early as January this year, some American investors said to Shell Finance reporters that they were bearish on Nvidia. In addition to the reason that Nvidia's share price might rise too fast and there might be a foam, there is also a bottleneck in the development of the big language model. This technology of generating the next sentence based on probability is "there is a limit", and the popularity of ChatGPT will indeed decline in the middle of 2023.
However, with the emergence of Sora in February this year, AI once again seized the hot spot in the market. Huang Renxun believes that behind the strong artificial intelligence application scenarios, including Sora, the upgrading and replacement of industry hardware is still in the early stages. He predicts that global AI data centers will double in size to $2 trillion in the next 4 to 5 years.
In fact, after the popularity of Sora, one of NVIDIA's largest buyers of AI computing chips, OpenAI CEO Sam Ultraman, also posted a message on his social media platform, "Why not 8?"
This refers to Sam Ultraman's ambitious self financing plan to build a wafer factory in US dollars and produce self-developed artificial intelligence chips, which raised up to 7 trillion US dollars. Obviously, the popularity of Sora gave Ultraman greater confidence, to the extent that he even wanted to expand the financing scale to 8 trillion US dollars.
This highlights the importance of the computing power industry, especially GPUs, as the upstream infrastructure of AI during its heyday. As the old saying goes, "During the gold rush, the most profitable people were those who sold shovels.". Nvidia, which currently has the most efficient GUP for training AI big models, is the biggest "shovel seller" in the AI era and may continue to profit from this identity.
Huang Renxun said on the financial report conference call that accelerated computing and generative AI have reached the tipping point, and the demand of companies, industries and countries around the world is surging
Nvidia announced on its official website that it will hold the GTC2024 conference from March 18th to 21st at the San Jose Convention Center. At that time, Huang Renxun will release the latest breakthrough achievements in the fields of accelerated computing, generative AI, and robotics.
According to a research report released by Guojin Securities, Nvidia's performance reflects the sharp increase in computing power demand from global customers. With the accelerated selection of large models such as Sora and Gemini1.5, as well as the commercial application promotion of large models, it indirectly confirms that computing power demand is expected to continue after 2024. The company's position as a leading global AI chip manufacturer is stable, and with accelerated computing and AIGC development reaching a critical point, the company is expected to continue to benefit.
New Beijing News Shell Finance reporter Luo Yidan