Dramatically enlivening otherwise dour sentiment in the equities space, technology giant Nvidia (US:NVDA) skyrocketed on Thursday, with NVDA gaining a blistering 24.37% in the open market. Catalyzing the extreme momentum was an outstanding earnings performance alongside strong expectations for the burgeoning artificial intelligence market.

NVDA stock heads into the coming four-day trading week up more than 172% for the year-to-date, and flirting ever-so-much closer to a trillion-dollar market capitalization. For the seventh-consecutive quarter, management has announced a cash dividend of 4 cents per share, with an ex-date of June 7.

According to Nvidia’s press release for the first quarter of fiscal year 2024 (ended April 30), management reported revenue of $7.19 billion, which while down 13% from the year-ago level representing a 19% lift from the previous (sequential) quarter. Most importantly, the latest sales tally significantly beat out the consensus estimate of $6.52 billion, per CNBC, which cited data from Refinitiv.

Although revenue growth declined 13% on a year-over-year basis, it increased sequentially and was higher than expected thanks to record Data Center revenue.

On the bottom line, GAAP earnings per diluted share clocked in at 82 cents, up 28% from the year-ago period and gaining 44% from the previous quarter. Non-GAAP adjusted earnings per share came out to $1.09, beating the Refinitiv consensus estimate of 92 cents.

“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” stated, in part, Nvidia founder and CEO Jensen Huang. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process,” he added.

AI’s Fertile Gound

With Nvidia’s graphics processing units (GPUs) powering the latest innovations in the broader digitalization movement, the tech specialist stands on fertile ground. According to Grand View Research, the global generative AI market alone may reach a valuation of $109.37 billion by 2030. If so, such an expansion would represent a compound annual growth rate of 35.6% from 2023 to 2030.

Among the highlights of the Q1 2024 disclosure was the introduction of Nvidia AI Foundations, which aims to “help businesses create and operate custom large language models and generative AI models trained with their own proprietary data for domain-specific tasks.”

ARK Invest wrote Friday that, looking ahead, her team expects “the explosion in AI hardware demand to cause accelerated revenue growth for software companies well-positioned to leverage their proprietary data/distribution advantages and deploy AI use cases across their product lines,” in a note on NVDA stock’s big move.

Looking ahead, Nvidia’s management team expects revenue to clock in at $11 billion, plus or minus 2%. Further, GAAP and non-GAAP gross margins are forecasted to reach 68.6% and 70%, respectively, plus or minus 50 basis points.

Further on those expectations, ARK Invest said that the “showstopper” in the earnings report the guidance for Q2 revenue of $11 billion, “leaps ahead of the $7.11 billion consensus expectation, pointing to year-over-year growth of 63%.”

Derivatives Take Flight

Not surprisingly, traders light up the derivatives board following the outstanding earnings report. During the May 25 session, market participants stacked the options arena with multiple transactions, according to the Fintel stock options flow screener.

So far this year, NVDA stock jumped over 165%. Nevertheless, Wall Street analysts have doubled down on their assessment of the tech giant. Presently, data from Barron’s shows that the average price target lands at $421.21. Moreover, the most optimistic forecast calls for NVDA hitting a staggering $600 per share.

This article originally appeared on Fintel

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