Nvidia's shares tumbled on Thursday, despite the fact that the company reported its fourth-quarter earnings on Wednesday that exceeded Wall Street's forecasts.
On February 16, 2022, Nvidia Corporation posted Q4 FY results that were above forecasters' estimates. Adjusted earnings per share increased 69.2 percent year over year, exceeding analyst expectations. In the most recent quarter, the graphics-chip manufacturer reported $7.64 billion in revenue, a 53 percent increase over the previous year. Analysts' projections for data center revenue were surpassed. In extended trading, the company's stock slid about 2%. Nvidia's shares have produced a total return of 73.1 percent over the last year, far outperforming the S&P 500's total return of 13.8 percent. It reported $3 billion in net profits, more than double the previous year's number, and outperformed Wall Street on both profit and sales. As it moves on from its unsuccessful acquisition effort of semiconductor-design specialist Arm Ltd, the firm reported record quarterly sales throughout its business and forecasted an increase in the current period. Investors are anticipating a strong earnings report from Nvidia, which is still experiencing all of the demand it can manage from gamers and cloud giants.
Nvidia Corp. fell 7% in pre-market trade on Thursday after the chipmaker reported better-than-expected fourth-quarter results but provided a cautious view on profit margins in the short term. Despite exceeding Wall Street forecasts with its fourth-quarter earnings and forecasting good growth for the current period, the share loss is a reflection of Wall Street's high expectations following Nvidia's withdrawal from a $40 billion acquisition of Arm Ltd. earlier this month.
Nvidia's data center revenue increased 71.5 percent year on year, outpacing the prior quarter's growth rate. Colette Kress, Nvidia's Chief Financial Officer, stated that data center revenue was largely driven by sales of Nvidia Ampere architecture GPUs. Last quarter, there were some hiccups. Nvidia's vehicle processors were sold at a lower rate than expected. And its adjusted gross margin was 67 percent, which was lower than the 67.1 percent predicted by analysts and lower than what several chipmakers have recently reported. Analog Devices Inc. reported a 72 percent margin in its quarterly earnings released earlier Wednesday.
Nvidia had record gaming sector revenues of $3.42 billion, as well as an all-time high in data center revenues of $3.26 billion, but slowing sales of its "CMP" chips, which are used by cryptocurrency miners, added a degree of concern to the chipmaker's outlook, with gross margins likely remaining at 67 percent in the current quarter. The firm has long focused on manufacturing chips for the gaming and graphics industries, and it was a pioneer in the creation of GPUs. It turns out that the powerful processing capabilities used by GPUs to power video games and graphics applications are also well-suited for artificial intelligence (AI) and machine learning. Both of these technologies are becoming more essential in the constantly expanding data center business. During the pandemic, demand for remote computer power surged significantly as more individuals began working from home and businesses were compelled to transfer certain activities online. This advancement has contributed to an increase in demand for Nvidia's data center CPUs.
The company's CEO, Jensen Huang, discussed the company's supply chain problems. "In the next quarters, we expect supplies to improve," he added. The business claimed it has $9 billion in long-term supply agreements, up from $2.54 billion a year earlier, as an indication of how it is tackling supply chain concerns.
Increased attention to the metaverse, a virtual environment based on technologies such as virtual reality (VR) and augmented reality (AR), is expected to drive up demand for the company's data center processors. Nvidia revealed in January that Meta Platforms, Inc. aims to use NVIDIA DGX A100 computers to develop the metaverse of their AI Research SuperCluster (RSC). Meta's AI supercomputer is likely to be Nvidia's DGX A100 systems' biggest client installation.
Following a January-quarter tally of $7.64 billion, Nvidia plans to produce roughly $8.1 billion in revenue in Q1 FY 2023, reflecting a YOY rise of nearly 42 percent. On May 12, 2022, Nvidia is expected to release their next earnings report for Q1 FY 2023
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