The high drama around Nvidia’s Q4 report was amplified on Wednesday afternoon in the US by an agonizingly long wait for the results.
Typically, the company’s report hits the wires around 4:20 Eastern time. By 4:30, the mainstream financial media was tying itself in anxious knots.
“Hmm, still waiting…” someone at Bloomberg’s news desk fretted. “There’s a lot of speculation here on why we’re late,” someone else worried.
Eventually, Nvidia said revenue for last quarter was $68.13 billion, up a cool 73% YoY and easily ahead of the $66 billion consensus.
The guide looked impressive. Nvidia expects $78 billion in current-quarter sales, and that’s assuming no revenue from China.
If that forecast pans out, it’d represent YoY sales growth of 77%. Consensus was looking for around $73 billion from the Q1 top-line outlook.
The non-GAAP margin for Q4 was 75.2%, better than expected and the highest in over a year. Between that and the Q1 margin guide — 75% — Nvidia likely did enough to placate investors harboring cost concerns. EPS of $1.62 beat by a dime.
Jensen Huang described “exponential” growth in demand for compute. “The agentic AI inflection point has arrived,” he declared, on the way to calling Grace Blackwell “the king of inference.” Vera Rubin, he went on, “will extend that leadership even further.”
In a nod to the idea that although hyper-scalers accounted for more than half of Nvidia’s data center revenue last quarter, the company’s broadening its sales base, Huang said “enterprise adoption of agents is skyrocketing” as customers “rac[e] to invest.”
I don’t want to gloss over important specifics or otherwise skimp on the analysis, but frankly I’m not sure there’s much else to know here. Last quarter’s revenue was a big beat, the current-quarter sales guide was a big beat too and gross margin’s 75% or better.
That at a time when the stock trades at “just” 25x, which isn’t expensive in the context of a rapidly-growing company at the bleeding edge of a technological epoch.
With the (obvious) caveat that it’s always difficult to say whether Nvidia “did enough” given how high this particular bar is, this was an objectively solid report which plainly suggests that if this is a bubble, it’s not going to burst tomorrow.
Pour one out for the gamers, homebrew pc builders, and computer nerds. At least they got rich if they invested in what they know!
The numbers are staggering. 75% margin! But I do wonder what the long term societal impact of needing to rent processing power is going to have.
Good summary!
Nvidia to the market’s rescue yet again!
They’ve got to get water and power and that will take another trip to the debt markets. NVDA did just fine, pretty great actually, but it’s being priced as part of a much larger and more expensive package…one that the bond markets have to swallow whole because excess cash flows are not going to get the job done. That’s the rub.