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Nvidia (NVDA) released its fourth quarter results after the bell on Wednesday, with revenue and bottom line numbers beating analysts’ expectations.
For the quarter, Nvidia reported adjusted earnings per share (EPS) of $5.16 on revenue of $22.1 billion. Analysts had expected EPS of $4.60 and revenue of $20.4 billion. This is a significant increase from his $6.1 billion in the year-ago quarter, when Nvidia reported his EPS of $0.88. Elaborating on Nvidia’s performance, the company reported $27 billion in revenue for all of 2022.
The company also said it expected first-quarter sales of $24 billion, plus or minus 2%, beating analyst expectations. Wall Street had expected $21.9 billion for the quarter.
“Accelerated computing and generative AI have reached a tipping point. Demand is surging across businesses, industries, and nations around the world,” NVIDIA CEO Jensen Huang said in a statement.
Nvidia’s stock price rose more than 12% in early trading on Thursday following the news.
“Our data center platform is driven by an increasingly diverse range of data processing, training and inference demands from large cloud service providers, GPU-focused providers, as well as enterprise software and consumer internet companies. “Vertical industries centered around automotive, financial services, and healthcare are now reaching multi-billion dollar levels,” Huang said in a statement.
Despite the overall strong performance, NVIDIA included at least one negative comment in the report, with CFO Colette Kress stating that due to U.S. licensing requirements, NVIDIA closed its data centers from China in the fourth quarter. It warned that revenue had fallen “significantly”. The United States has blacklisted sales of certain Nvidia chips to China over concerns that they could be used for military purposes.
Nvidia’s most important data center business, which includes sales of high-performance GPUs for AI applications, had revenue of $18.4 billion, beating analysts’ expectations of $17.2 billion. The company reported revenue of $3.62 billion in the same period last year. Overall, Nvidia’s data center revenue grew 217% for the year.
Nvidia’s data center division is leading the ship, but its gaming business remains an important part of the company. The division’s sales reached $2.9 billion. Investors had expected sales of $2.7 billion, up from $1.8 billion a year ago.
Nvidia’s stock has soared more than 200% in the past 12 months, easily outpacing rivals AMD (AMD) and Intel (INTC), thanks to its status as the world’s leading AI chip maker.
However, NVIDIA’s growth faces challenges from all sides. The company’s biggest rival, AMD, is investing heavily in its AI chips, including the new MI300X. AMD says the chip outperforms Nvidia’s H100 in certain workloads, but Nvidia disputes that claim, saying AMD’s testing is incomplete. Intel also has its own server chips and continues to improve their capabilities.
Nvidia’s customers are also increasingly looking to develop their own specialized AI chips to reduce their dependence on Nvidia’s products. Amazon, Google, Meta, Microsoft, and Tesla (TSLA) are just a few of the major companies currently offering or actively developing their own AI chips.
And this could be especially problematic since the company said more than half of its data center revenue in the fourth quarter came from large cloud providers for internal workloads and external customers.
But Nvidia isn’t taking this threat silently. According to Reuters, the company has met with Alphabet, Amazon, Meta, Microsoft, and OpenAI to discuss building custom chips.
daniel howley I’m the technology editor at Yahoo Finance. He has been covering the technology industry since his 2011. You can follow him on Twitter. @Daniel Howley.
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