Why Nvidia Shares Are Surging

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When Nvidia Corp. (NASDAQ: NVDA) reported its fourth-quarter financial results after the markets closed on Thursday, the company posted $1.72 in earnings per share (EPS) on $2.91 billion in revenue. That compares with consensus estimates from Thomson Reuters of $1.16 in EPS on revenue of $2.68 billion. In the same period of last year, Nvidia said it had EPS of $0.99 on $2.17 billion in revenue.

During this quarter, the firm announced partnerships to further artificial intelligence (AI) in key vertical industries, including initiatives with GE Health and Nuance in medical imaging.

Separately, Nvidia announced and demonstrated its DRIVE Xavier, the world’s first autonomous machine processor, with customer availability in the first quarter. Not to mention, Nvidia DRIVE is the world’s first functionally safe AI self-driving platform.

Looking ahead to the first quarter, Nvidia expects to see gross margins of 63.0% and revenues of 2.90 billion, plus or minus 2%. The consensus estimates call for $0.98 in EPS and $2.48 billion in revenue for the quarter.

On the books, Nvidia’s cash, cash equivalents and marketable securities totaled $7.12 billion at the end of the quarter, up from $6.80 billion in the same period of last year.

Jensen Huang, Nvidia founder and CEO, commented:

We achieved another record quarter, capping an excellent year. In a powerful sign of our progress, attendees at NVIDIA’s GPU Technology Conferences reached 22,000, up tenfold in five years, as software developers working in AI, self-driving cars, and a broad range of other fields continued to discover the acceleration and money-saving benefits of our GPU computing platform.

Shares of Nvidia closed Thursday down nearly 5% at $217.52, with a consensus analyst price target of $220.08 and a 52-week range of $95.17 to $249.27. Following the announcement, the stock was up about 10% at $239.50 in Friday’s premarket trading session.