Nvidia Q3 - Consistency is Key

Investors eagerly awaited Nvidia's earnings report this week. Everyone was on tenterhooks, wondering whether the chip giant could maintain its remarkable momentum from 2023. Nvidia delivered! Its fourth-quarter results underscored the relentless demand for artificial intelligence (AI) systems, driving the chip giant to keep pace with skyrocketing needs.

Sales for the quarter were $22.10 billion, more than tripling year-on-year. Earnings surged over eightfold to $5.16 per share, surpassing analyst forecasts and propelling Nvidia's stock to a 16% increase yesterday, adding $277 billion to its market cap in just one trading session. This one day move broke Meta's very recent record of $197 billion.

Nvidia's success serves as a barometer for the strength of the AI boom, as evidenced by its critical role in supporting big tech firms like Microsoft (ChatGPT), Google (Baird now Gemini), and Apple (Siri 2.0) in their AI endeavours.

Nvidia's evolution from a gaming-focused company to a dominant player in the AI landscape has been swift and noteworthy, reshaping its trajectory within just three years. The company's unstoppable growth has also elevated its market value, with Nvidia crossing the trillion-dollar mark in June and surging to over $1.94 trillion today.

Nvidia still faces challenges due to supply constraints. Complex packaging processes have exacerbated the shortage, prolonging the imbalance between supply and demand.

Moreover, geopolitical tensions, notably restrictions imposed by the US government on chip exports to China, have added a layer of complexity to Nvidia's operations and affected its business in key markets.

Nevertheless, Nvidia's dominance in the AI space remains undisputed. The Data Centre division is now the primary driver with $18.4 billion revenue, up a staggering 409%, significantly outpacing its once dominant Gaming segment which brought in $2.87 billion, up 56%.

If I could use one adjective to describe Nvidia's performance, it would simply be "consistent." That is what you want from a company that's spearheading a new sector, consistency in everything they do. Hold your Nvidia shares strong and long.

The picture below should read: "There's no DNA in my blood, just NVDA."