Nvidia has once again exceeded profit expectations, with revenue growing 262% year-over-year to $26 billion in the first quarter of fiscal 2025. This growth was driven by the company’s dominance in the data center market, where it holds an estimated 98% share. Operating income jumped 690% to $16.9 billion, and earnings per share rose to $6.12, beating analysts’ estimates.
Despite this impressive performance, Nvidia’s management anticipates a slowdown in revenue growth in the future as the initial surge in demand for AI-related products begins to wane. However, the company remains optimistic about its prospects and expects revenue of $28 billion in the second quarter of fiscal 2025.
CEO Jensen Huang highlighted the continued strong demand for Nvidia’s products, particularly in the areas of training and inference for AI models. The company also saw significant purchases from customers like Tesla and Metaplatforms, indicating a growing demand for its products.
Some investors, such as Stanley Druckenmiller and David Tepper, have started selling their stakes in Nvidia after a significant increase in the stock’s value. However, Nvidia’s business outlook remains strong, with no signs of competitive pressure despite recent product launches by Advanced Micro Devices and Intel.
Nvidia’s leadership envisions a future where the company will play a pivotal role in driving the “next industrial revolution” through the development of AI factories. The company’s recent performance and optimistic outlook have led to a 7% increase in its stock price in premarket trading, suggesting that investors see further potential upside.
In conclusion, Nvidia’s impressive financial results and continued growth in the AI sector bode well for its future prospects. Despite some concerns about the stock’s valuation and potential market saturation, the company’s leadership is confident in its ability to drive innovation and maintain its competitive edge in the industry.
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https://www.fool.com/investing/2024/05/23/nvidia-deliver-round-record-profit-ai-stock/