Nvidia The company’s stock rose 1.3% in premarket trading on Thursday, as investor concerns about the AI infrastructure boom dampened enthusiasm for the company’s better-than-expected earnings.
LSEG said fiscal fourth-quarter revenue reached $68.13 billion, beating analysts’ expectations of $66.21 billion. Total revenue was up 73% from the numbers Nvidia reported a year ago, and guidance also beat expectations.
“Amid concerns about the quantum nature of AI, monetization, and the potential for worsening cash flows, the conversation has shifted from short-term results to the sustainability of AI capital investment,” Richard Claude, portfolio manager at Janus Henderson Investors, told CNBC in an email.
Nvidia stock price over the past year.
Investor concerns about AI
Hyperscalers wiped more than $1 trillion from their market caps in early February before offsetting their losses in recent weeks.
Semiconductor AMD fell 17% earlier this month after the company announced a forecast that was better than many analysts expected, although some expected a stronger outlook.
“The market is currently grappling with broader AI concerns,” said Dan Hanbury, global strategic equity co-portfolio manager at NinetyOne.
“The question weighing on investors’ minds is how NVIDIA can sustain its impressive growth rate now that its core hyperscalers are spending most of their cash flow on AI-related capital expenditures.”
Data centers drive growth
Nvidia’s data center division, powered by market-leading chips, fueled the revenue boom, contributing 91% of sales.
Data center revenue for the quarter was $62.3 billion, beating expectations of $60.69 billion, according to StreetAccount.
Nvidia announced an upbeat outlook for fiscal first-quarter revenue of $78 billion, plus or minus 2%, well above analysts’ expectations of $72.6 billion.
“The $78 billion revenue outlook is well ahead of even the most bullish buyers’ expectations and represents four consecutive quarters of accelerating growth, in contrast to concerns about an economic slowdown,” Claude said.
