Nvidia stock pops 10% after-hours following 'insane result'

This tech behemoth's quarterly update has smashed expectations with its update.

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NVIDIA Corp (NASDAQ: NVDA) stock looks set to have a very good session tonight on Wall Street.

In response to the semiconductor company's quarterly update, its shares have jumped 10% in after-hours trade.

Nvidia stock jumps on quarterly update

For the three months ended 31 December, Nvidia reported the following (in USD):

  • Revenue up 265% year on year to $22.1 billion
  • Data Centre revenue up 409% to a record of $18.4 billion
  • Gross margin up 12.7 percentage points to 76%
  • Net income up 769% to $12.3 billion
  • Earnings per share up 765% to $4.93

The company also released its full-year results with this fourth quarter update. It reported:

  • Full-year revenue up 126% to a record of $60.9 billion
  • Gross margin up 15.8 percentage points to 72.7%
  • Net income up 581% to $29.76 billion
  • Earnings per share up 586% to $11.93

What happened during the quarter?

During the quarter, Nvidia reported explosive sales and earnings growth after AI hit a "tipping point."

Nvidia's founder and CEO, Jensen Huang, explained:

Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.

Our Data Center platform is powered by increasingly diverse drivers — demand for data processing, training and inference from large cloud-service providers and GPU-specialized ones, as well as from enterprise software and consumer internet companies. Vertical industries — led by auto, financial services and healthcare — are now at a multibillion-dollar level.

Looking ahead, management is guiding to first-quarter revenue of $24 billion (+/- 2%) with a gross margin in the range of 76.3% to 77%.

How does this compare to expectations?

The good news for owners of Nvidia stock is that both its result and guidance are comfortably ahead of the market's expectations.

In respect to its earnings for the quarter, the market was expecting earnings per share of $4.64. Whereas for its revenue, analysts were forecasting $21.9 billion for the quarter.

'An insane result'

Saxo Head of Equity Strategy, Peter Garnry, was blown away by the result. He said:

This is just an insane result, and the guidance is strong. The wording 'tipping point' is the strongest forward-looking indication the company has provided so far since generative Artificial Intelligence (AI) took off. I have never seen anything like this in my career. However, it will be increasingly difficult for Nvidia to exceed expectations, and this could be the last insane quarter.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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