[ad_1]
Nvidia (NVDA 0.35%) I did it again. The company exceeded management’s own revenue estimates by more than $2 billion for three consecutive quarters. The technology company is a clear leader in advancing various applications of artificial intelligence (AI).
In Nvidia’s fiscal fourth quarter of 2024 (ending January 28), the company reported revenue of $22.1 billion. This is a 265% year-over-year increase and well above his previous guidance of $20 billion.
Nvidia and the AI boom
This one graph pretty much tells the entire story.
Sales in the data center sector, which includes advanced AI chips, exploded last year. Three of Nvidia’s four business segments increased year-over-year sales in the fourth quarter, with automotive being the only laggard. However, the current focus is on the data center sector. Data center revenue increased by more than 400% compared to the same period last year.
The company believes this expansion will continue, as management believes total sales for the current quarter will be approximately $24 billion. These are also high-margin products. For the full year 2024, gross margin expanded to nearly 73% from just 57% in his 2023 fiscal year. It is expected to continue rising to over 76% in the first quarter of fiscal 2025.
Of course, investors noticed these amazing numbers, and Nvidia’s stock price soared along with its sales and profits.
There may be ups and downs in the stock price, but it still doesn’t seem overly expensive. That’s because growth is still accelerating. A forward price/earnings ratio of 32 times is expensive by traditional standards, but this metric can decline quickly as earnings grow.
And the company still has potential to grow in other areas. As self-driving cars become more mainstream, the aforementioned automotive segments could grow rapidly. This is just another reason why NVIDIA definitely has a place in the growth stock portion of your portfolio.
[ad_2]
Source link