Nvidia Makes Headlines After 265% Earnings Growth

It is the ‘Age of AI,’ and Nvidia (NASDAQ: NVDA) is expected to make the most of it. Nvidia is a large-cap company and investors and financial firms around the world have eyes on Nvidia.

Nvidia and the Market Euphoria

The company has shown phenomenal performance both on a fundamental basis and technical basis. Despite a highly overvalued price-to-earnings (P.E) ratio of 91, the bulls continue to push forward. 91 P.E. states that a buyer of the stock at its current price is willing to pay 91 dollars in exchange for earning 1 dollar, this is often labeled as market euphoria.

Now, the Euphoria around Nvidia is not only about the stock price but also on the earnings in the recent quarter.

Nvidia reported growth in revenue in the second quarter of 2023 after a negative year-on-year (YOY) growth in the first quarter of the same FY.

Nvidia posted a growth of 101%, with hopes held high for the next quarter, it posted a revenue of $18.1 Billion, making a little over 3 times of what it made in the same quarter of the previous year. In the 4th quarter, the revenue folded close to 4 times as per the YOY basis. When a deep analysis of the sources was done, it was found that, in the 4th quarter the revenue came majorly from 4 sources.

Nvidia: Revenue Analysis and Sources for the 4th Quarter

One of the biggest sources of revenue for Nvidia was the Data Center. With the introduction of NVIDIA NeMo™ Retriever, which is a generative AI microservice and NVIDIA MONAI™ cloud APIs. the company acquired $18.4 Billion.

Nvidia is known for its gaming Chips and GPUs and it has made them $2.9 Billion in revenue. With the launch of GeForce RTX™ 40 SUPER Series GPUs and the announcement of AI capabilities for RTX AI PCs. The gaming segment was also a major source of revenue for the company. 

Nvidia’s Professional Visualization made them $463 Million in the quarter, this revenue from its GPUs serves industries such as architecture, engineering, and entertainment. In this quarter, the company announced the adoption of NVIDIA Omniverse™ as well as the NVIDIA RTX 2000 Ada Generation GPU.

The last major source of revenue for Nvidia was its Automotive segment, which has advanced driver-assistance systems (ADAS). Nvidia made close to $181 Million after announcing NVIDIA DRIVE platforms. 

The numbers suggest that Nvidia continues to innovate in multiple segments. This has propelled the growth of revenue in recent quarters. This also explains the market euphoria that has been around NVDA stock because of the once-in-a-blue-moon performance of any large-cap company like Nvidia.

Conclusion

The NVDA stock almost tripled the revenue of investors last year. Despite being a highly overvalued stock, investors are buying it frequently, highlighting the market euphoria around NVDA stock. Its major sources of revenue including Data Center, Professional Visualization and Automotive, propelled revenue growth by 265% year on year.

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading stocks comes with a risk of financial loss.

Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.