NVIDIA Corporation (NVDA) is scheduled to announce its fourth-quarter earnings for fiscal 2024 on February 21. Analysts predict a remarkable 239.1% year-over-year increase in revenue, reaching $20.52 billion. Furthermore, the company’s earnings per share (EPS) are anticipated to surge by 425.8% compared to the same period last year, reaching $4.63.
key points:
- NVIDIA anticipates a remarkable 239.1% surge in Q4 revenue to $20.52 billion.
- Partnership with Pawsey Supercomputing Research Centre amplifies quantum computing capabilities.
- The revolutionary Grace Hopper Superchip promises breakthroughs in quantum simulations.
- Collaboration with Cisco Systems focuses on AI infrastructure solutions.
- Despite mixed financials, NVDA’s solid growth trajectory and profitability bode well for the future.
In a strategic move aimed at enhancing its future prospects, NVIDIA recently announced a partnership with Australia’s Pawsey Supercomputing Research Centre on February 18. This collaboration involves integrating the NVIDIA® CUDA Quantum platform, powered by NVIDIA Grace Hopper™ Superchips, into the National Supercomputing and Quantum Computing Innovation Hub. This initiative is expected to significantly strengthen NVIDIA’s position in the field of quantum computing.
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The innovative NVIDIA Grace Hopper Superchip, combining the NVIDIA Grace CPU and Hopper GPU architectures, offers unmatched performance in quantum simulations. These simulations play a vital role in tackling the key challenges of quantum computing, including algorithm discovery, device design, and the advancement of error correction, calibration, and control techniques.
In 2024, NVIDIA shares traded at $726.13 per share on Monday, a slight decline of $0.45 (-0.06%). Year-to-date, NVDA has surged by 46.63%, outperforming the S&P 500 index’s 5.09% increase during the same period.
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Additionally, NVIDIA’s partnership with Cisco Systems, Inc. (CSCO), revealed on February 6, focuses on providing AI infrastructure solutions designed for effortless deployment and management within data centers. This collaboration empowers enterprises with the substantial computational capabilities necessary to thrive in the AI-driven environment.
Businesses globally are increasingly adopting generative AI to transform their operations, and the collaboration between NVDA and CSCO facilitates easier access to state-of-the-art infrastructure. By simplifying the acquisition of crucial AI resources, NVDA aims to empower enterprises to harness the transformative capabilities of AI, solidifying its role as a pivotal facilitator of technological progress in the digital era.
Over the last month, NVDA shares have surged by 28.8%, and over the past three months, they have seen an impressive gain of 46.8%, concluding the latest trading session at $726.13.
Here’s an overview of NVDA’s financial metrics that could impact its near-term price performance:
Nvidia Mixed Financials:
In the fiscal 2024 third quarter ending October 29, 2023, NVDA saw impressive growth in non-GAAP gross profit, net income, and EPS. However, there were concerns regarding cash outflows from investing and financing activities.
Solid Growth Record of Nvidia :
Over the past three years, NVDA has shown robust growth in revenue, EBITDA, net income, EPS, total assets, and levered free cash flow, indicating a strong performance trajectory.
Optimistic Analyst Estimates:
Analysts project significant year-over-year increases in revenue and EPS for fiscal years 2024 and 2025, reflecting positive market sentiment and growth expectations.
Sound Profitability:
NVDA demonstrates strong profitability metrics, with gross profit margin, EBITDA margin, net income margin, and levered free cash flow margin surpassing industry averages.
Stretched Valuation:
NVDA’s forward non-GAAP P/E, EV/Sales, EV/EBITDA, and Price/Sales ratios indicate a stretched valuation compared to industry averages, potentially posing a risk to investors.
POWR Ratings Exhibit Mixed Prospects:
NVDA’s overall POWR Rating of C suggests a Neutral stance, with strengths in Growth but weaknesses in Valuation and Stability. It ranks 20th out of 90 stocks in the Semiconductor & Wireless Chip industry.
Bottom Line:
While NVDA shows promising growth prospects, investors should carefully consider its current stability, valuation, and recent financial performance before making investment decisions. Waiting for a favorable entry point could be prudent given the nuanced landscape.
Comparing NVIDIA Corporation (NVDA) to Industry Peers:
A Look at Performance and Ratings
While NVDA maintains a Neutral rating with an overall grade of C, consider exploring these Strong Buy rated stocks within the Semiconductor & Wireless Chip industry: Photronics, Inc. (PLAB), ChipMOS TECHNOLOGIES INC. (IMOS), and Everspin Technologies, Inc. (MRAM). For further examination of Semiconductor & Wireless Chip stocks, click here.
Next Steps:
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