In the last quarter of fiscal year 2024, chipmaker Nvidia (NVDA) once again surprised the market with growth that surpassed expectations. Analysts had predicted net revenue of $16.09 billion and adjusted earnings per share (EPS) of $3.36. However, Nvidia exceeded these estimates by more than 10%.
Following this report, Nvidia’s shares have surged by 30% since mid-November 2023.
Looking ahead to Nvidia’s Q4 2024 earnings release, analysts are anticipating significant growth across the board. The consensus estimate for revenue is $20.2 billion, representing a year-over-year increase of 234% and a quarter-over-quarter rise of 11.56%. This ambitious growth aligns with Nvidia’s own guidance of revenue in the $20 billion range.
Wall Street’s expectations also match Nvidia’s projections for gross margin, with analysts predicting a robust 75.5% (non-GAAP) margin. Based on these revenue and margin forecasts, adjusted EPS is expected to reach $4.16, marking a 628% year-over-year increase.
Given Nvidia’s recent remarkable growth and the increasing demand for AI-related chips, meeting these ambitious targets shouldn’t be too challenging. However, surpassing Wall Street’s expectations by a significant margin might be less likely given the already optimistic consensus.
It’s important to note that even with an EPS of $4.16 for the quarter (which annualizes to approximately $16.6), Nvidia’s price-to-earnings (P/E) ratio would remain high at around 38x, based on a share price of $627.
While Nvidia is undoubtedly a remarkable company, its lofty valuation prompts the question: Is it a great company but not necessarily a great investment?
Key factors to watch in this quarter include how US restrictions on chip exports might impact Nvidia’s performance, the success of its Data Center segment, updates on Total Addressable Market (TAM), new partnerships, chip developments, and the status of H200.
Additionally, Nvidia’s guidance for the first quarter of fiscal year 2025 will be crucial. A more optimistic outlook from the company could sustain a bullish trend, while a more cautious outlook could lead to negative reactions from investors and traders.
expectations for Nvidia’s upcoming earnings are optimistic, with both analysts and Nvidia’s management projecting continued growth and sustained profitability. Shareholders should pay attention to regulatory challenges, market trends, and future guidance provided by the company.
While many anticipate strong earnings, surprises—both positive and negative—cannot be ruled out. Nvidia may find new avenues for growth or expand its market share further, but there’s also a risk of disappointing investors if expectations aren’t met.
(Note: This is not investment advice. The author may have holdings in the mentioned stocks, and affiliate links may be present, though they do not influence the content.)
Nvidia’s Q4 2024 earnings financial metrics –
Nvidia’s Q4 2024 earnings report reflects a company continuing to outperform expectations, with robust revenue growth and impressive financial metrics. While challenges such as regulatory uncertainties and high valuation persist, Nvidia’s ability to innovate and capitalize on emerging trends positions it as a key player in the technology sector. Investors should closely monitor future developments and guidance from Nvidia as they assess the company’s long-term prospects in the market.
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