Despite a four-session losing streak that let some air out of the tires, there’s no arguing that Nvidia ‘s stock was priced for perfection. Fortunately, perfection is exactly what CEO Jensen Huang and management delivered after the closing bell Wednesday. Quarterly results beat expectations on all key metrics, and the team once again guided the current quarter above what Wall Street was looking for. Revenue for the artificial intelligence chipmaker’s fiscal 2024 fourth quarter, which ended Jan. 28, skyrocketed 265% year-over-year to $22.1 billion, well ahead of analysts’ forecasts of $20.62 billion, according to data provider LSEG, formerly known as Refinitiv. Adjusted earnings-per-share surged 486% to $5.16, exceeding the LSEG compiled consensus estimate of $4.46. Adjusted gross margin of 76.7% also trounced the Street’s 75.7% estimate, according to market data platform FactSet. The results were very strong, however, it’s Nvidia’s first quarter of fiscal 2025 guidance that put shares on the move. In after-hours trading, the stock jumped 8.5%. If that gain were to hold by Thursday’s close, shares would only be a tad short of last week’s record close of $739 each on Valentine’s Day. NVDA 5Y mountain Nvidia 5 years The Nvidia phenomenon is something for all investors to take note of and study. This is a stock that was up nearly 240% in 2023, tacking on another roughly 35% year-to-date in 2024. That compounds to an approximately 360% gain since the start of 2023. If that’s the only thing you concern yourself with, it’s hard to imagine the run can continue. However, as we’ve noted time and again, price is what you pay, value is what you get. With Wednesday evening’s results, Nvidia once again proved that despite the rapid rise in stock price, when the driver of the move is earnings growth and not multiple expansion, the move is sustainable. The multiple has actually gone down over the past year as the pace of upward earnings revisions kept exceeding the stock price…
Read the full article here
