Few investors had any doubt that Nvidia (NVDA) would post a blockbuster quarter. In the fiscal fourth quarter, Nvidia posted a 75% Y/Y increase in its data center revenue. This is a record.
Nvidia earned $1.62 a share (non-GAAP) on revenue of $68.13 billion. Data center revenue topped $62.3 billion. The results demonstrate that the company does not need to return to the gaming GPU business for its future growth.
Looking ahead, the company expects Q1 revenue of up to $78 billion. It is assumed that it will have no revenue from China. GAAP gross margins of nearly 75% is an exceptional figure. The GPU chip provider faces little to no competition. Neither Advanced Micro Devices (AMD) nor Intel (INTC) is likely to take any of Nvidia’s market share.
Plans for Qualcomm (QCOM) and ARM Holdings (ARM) to carve out some of Nvidia’s business will not matter much. ARM stock trades at a 175 times P/E ratio, so expectations are high that ARM will grow overall.
Qualcomm trades at a 30x P/E. It lost 9.55% for shareholders in the last year. That would put pressure on the smartphone chip supplier. Qualcomm has yet to position itself in the AI sector to expand profit margins.
In after-hours trade, NVDA stock gained by over 2% but then fell by 0.25% in the early evening.
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