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Nvidia (NASDAQ:NVDA) shares surged 8% during postmarket trading Wednesday as the company once again surpassed expectations on its fourth-quarter fiscal 2024 financial results.
During the postmarket earnings call, executives detailed an exhaustive list of companies and industries embracing Nvidia’s generative AI, providing a never-ending deluge of demand.
“Generative AI is a new application,” said Jensen Huang, founder and CEO of Nvidia. “It is enabling a new way to create software. It’s a new way of computing. This is enabling a whole new industry. This is driving our growth.”
“We are diversifying into new industries,” he added. “Auto, health, robotics, financial services … a collection of multibillion-dollar industries are embracing our generative AI.”
He anticipates AI generation factories evolving in every industry.
“The world has reached a tipping point,” said Colette Kress, Nvidia’s chief financial officer. “Fourth-quarter Data Center revenue was driven by generative AI and training. We estimate approximately 40% of Data Center revenue for the past year was from AI.”
She highlighted the recent success of Microsoft’s (MSFT) Copilot, which uses Nvidia’s generative AI. Also, Meta (META), in its latest quarter, referenced generative AI as a primary driver behind its growth.
“One of the most notable trends of the past year is the adoption of AI by industries,” Kress said. “Almost 80 vehicle manufacturers are using Nvidia’s AI structure for autonomous driving and other applications. We expect this to grow.”
“Pharmaceutical companies are embracing Nvidia’s generative AI for computer-aided drug discovery,” she added. “In financial services, companies are using AI for fraud detection, customer service and trading.”
Sovereign AI has become another area of demand for markets outside of the U.S. and China.
“Growth was strong all over the world besides China,” Kress said.
The data center revenue percentage from China was in the mid-single-digits during the fourth quarter, Kress said. Nvidia expects that to remain the same for the quarter in progress.
Looking ahead
In new products, Nvidia’s Spectrum-X networking platform is the first Ethernet platform that improves the performance of generative AI on the ethernet.
“We are on track to ship Spectrum-X this quarter,” Kress said.
Looking to the first quarter of fiscal 2025, Nvidia expects to generate $24B in revenue, plus or minus 2%. Analysts were forecasting $22B in revenue.
“We guide one quarter at a time, but fundamentally the conditions for growth are excellent,” Huang said. “We are at the transition from general purpose computing to accelerated computing.”
For the fourth quarter ended Jan. 28, 2024, Nvidia earned an adjusted $5.16 per share on $22.1B in revenue. Analysts expected the company to post earnings of $4.64 per share on revenues of $20.5B for the quarter.