How far has AI chip company Nvidia Corp. (NASDAQ: NVDA) come in the past decade? In terms of market cap, a $1,000 investment 10 years ago would be worth $148,000 today. According to CNBC, such an investment in 1999, when Nvidia went public, would be worth $2,784,000. Much of that increase came last year, when Nvidia stock was up 215%. So far this year, the share price has risen 36%. These do not consider the 16% jump Nvidia shares should have at the open after spectacular earnings.
Nvidia posted earnings that were better than Wall Street forecasts and nothing short of spectacular. Revenue was up 265% year over year to $22.1 billion. Net income rose 769% to $12.3 billion. Jensen Huang, founder and CEO of Nvidia, said, “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.” It is an extraordinary dominance. Rival AMD will be well behind in development and sales. Nvidia expects equally strong results in the current quarter with revenue of $24 billion. Its sales engine is not even slowing. (This is how much Nvidia’s top executives made in 2023.)
MarketWatch noted that Nvidia’s most impressive number was not highlighted. “Among the record-setting elements of Nvidia’s stunning fiscal fourth quarter was its 76% GAAP gross margin, up from 66% a year before.” The financial website pointed out that only Arm had better comparable numbers.
Nvidia stock, riding a wave as the most important company in AI chips, does not appear to have peaked yet. Is it even close?
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