Chip maker NVIDIA Corp (Nasdaq: NVDA) reported better-than-anticipated fiscal 2023 fourth-quarter results. The company also issued a robust Q1 revenue outlook that beats Wall Street expectations. Following the quarterly results, the share price of GeForce graphics processing units (GPUs) provider rose by 14.02%, or $29.10, to close at $236.64.
Santa Clara, California-based company reported fourth-quarter revenues of $6.05 billion, down 21% from $7.64 billion in the similar quarter last year.
For the fourth quarter, which ended January 29, 2023, NVIDIA posted a net income of $1.414 billion, or $0.57 per share, compared with a net income of $3 billion, or $1.18 per share, in the quarter that ended January 30, 2022.
Total pre-tax impact of non-GAAP adjustments and income tax impact of non-GAAP adjustments, the company recorded a Q4 2023 non-GAAP net income of $2.174 billion, or $0.88 per share, a decrease from $3.350 billion, or $1.32 per share, in Q4 2022.
Analysts surveyed by Refinitiv anticipated the company would report earnings of $0.81 per share on revenues of $6.01 billion.
Segment wise:
- Data Center revenues grew by 11% y-o-y to $3.62 billion in 4Q 2023 but missed analysts’ estimates of $3.84 billion.
- Gaming revenues were $1.83 billion, a decrease of 46% from last year. Analysts surveyed by Refinitiv had anticipated revenues of $1.52 billion.
- Professional Visualization revenues fell by 65% y-o-y to $226 million.
- Automotive and Embedded revenues surged 135% y-o-y to $294 million.
Looking ahead, NVIDIA expects 1Q 2024 revenues of $6.50 billion (+/- 2%). Wall Street analysts forecast revenues of $6.33 billion. Also, the company forecasts GAAP and non-GAAP gross margins of 64.1% and 66.5%, respectively (+/- 50 basis points).
Even though the company reported a decline in revenues and earnings compared with last year, investors and funds perceive NVIDIA as one of the best semiconductor stocks that can withstand an economic slowdown.
The solid Data Center revenues suggest that the company will gain in a big manner from AI (artificial intelligence) powered software such as ChatGPT and Microsoft Bing’s AI chatbot. Notably, the company’s graphic processors are ideal for running machine learning systems.
Jensen Huang, founder and CEO of NVIDIA, presented an upbeat market demand scenario: “From startups to major enterprises, we are seeing accelerated interest in the versatility and capabilities of generative AI.”
During the latest quarter, the company returned $1.15 billion in the form of cash dividends and share repurchases. NVIDIA’s board has approved a dividend of $0.04 per share, payable on March 29, 2023.
The quarterly earnings beat and solid Q1 revenue outlook are expected to keep the stock of NVIDIA slightly bullish in the near future.
The historical price chart indicates that the stock of NVIDIA is moving along an ascending channel, as shown in the image below. The stock is moving above its 50-day moving average while the Chaikin Money Flow indicator is showing a positive reading. Therefore, we anticipate the share price of NVIDIA to remain in an uptrend in the short term.
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