Jensen Huang, president of Nvidia, holding the Grace hopper superchip CPU used for generative AI at the Supermicro keynote presentation during Computex 2023.
Walid Berrazeg | Lightrocket | Getty Images
Nvidia shares jumped more than 12% in premarket trade on Thursday after the chip giant posted bumper earnings that beat Wall Street estimates.
The U.S. tech giant posted revenue of $22.10 billion for its fiscal fourth quarter, a rise of 265% year-on-year, while net income surged by 769%, as the company continues to see a boost from excitement over artificial intelligence.
Nvidia chips are used to train the huge AI models such as those developed by Microsoft and Meta.
Nvidia sees no signs of slowing. The company forecast its revenue in the current quarter will hit $24 billion, way ahead of estimates.
“Fundamentally, the conditions are excellent for continued growth” in 2025 and beyond, Nvidia CEO Jensen Huang told analysts on Wednesday, adding to the bullish sentiment around the stock.
Nvidia’s Data Center business, which includes the company’s H100 graphics cards that are used for AI training, posted sales of $18.4 billion in the fourth quarter, representing 409% year-on-year growth.
The positive outlook from Nvidia prompted a round of broker upgrades on Thursday. JPMorgan raised its price target on Nvidia’s stock from $650 to $850, while Bank of America Global Research hiked its target from $800 to $925.
Nvidia’s stock closed at $674.72 on Thursday. Shares were under pressure ahead of the earnings report as traders took profit and investors were concerned that Nvidia might not be able to hit lofty expectations.
But its market-beating numbers dispelled those fears and also pulled other global chip stocks higher.