Nvidia (NVDA.US) is gaining nearly 8% ahead of the Wall Street open as revenue and earnings beat analysts' expectations. Wall Street's hopes are being ignited by the data center segment, which could be the beneficiary of increased demand for high-performance graphics chips to drive AI development. Since the beginning of the year, Nvidia's stock price has already risen nearly 45%:
Revenue: $6.05 billion vs. $6 billion expectations ($7.64 billion in Q4 2021)
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Open account Try demo Download mobile app Download mobile appEPS: $0.88 vs. $0.81 expectations ($1.32 in Q4 2021)
Data centers: $3.62 billion vs. $3.87 billion expectations (up 11% y/y)
Gaming: $1.83 billion vs. $1.6 billion expectations (down 46% y/y)
Professional visualization: $226 million vs. $195 million expectations (down 65% y/y)
Automation and robotics (automotive): $294 million vs. $267 million expectations (up 135% y/y)
Nvidia is beginning to be seen by Wall Street as a chipmaker that can more gently withstand a possible economic downturn thanks to its advanced technology. This is due, among other things, to the production of high-performance graphics chips used to 'train' artificial intelligence (machine learning). AI has enjoyed a surge in investor interest since ChatGPT's debut in November 2022. Nvidia CEO Jensen Huang indicated that the trend is now at a 'tipping point' and the opportunities offered by generative AI are awaiting wide adoption among companies around the world.
- The company reported that growth in data centers has fueled higher demand from U.S. cloud providers - a segment that can benefit from generative AI, which requires powerful computing power;
- Gaming revenue fell as expected, as the market saturated in recent years when sales were sharply elevated (the effect of a high base from the pandemic era) - it is now correcting this unsustainable jump in demand, but still gained nearly 100% from Q4 2019;
- Nvidia indicated that, it is taking fewer orders for chips for gaming consoles (Nintendo, among others) - orders are still dragged down by high inventory of trading partners.
Nvidia shares (NVDA.US), D1 interval. The SMA100 (black line) crosses the SMA200 (red line) from downside, forming a bullish 'golden cross' formation, the last time this happened in August 2019. The nearest levels of resistance and support are marked by 61.8 and 38.2 Fibonacci abolition, respectively, of the downward wave started in 2021. Pre-opening trading indicates a start to today's session near $221 per share. Source: xStation5
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