NVIDIA Records Highest Earnings Amid Strong Demand... Market Reaction Is 'Uncertain'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] U.S. semiconductor company Nvidia recorded its highest-ever revenue in the fourth quarter of last year, driven mainly by increased demand from cloud service providers and enterprises building data centers. Nvidia also forecasted first-quarter results this year that exceeded market expectations, but it appears to have fallen short of the high hopes in a market buoyed by semiconductor boom optimism.

According to CNBC and other outlets on the 16th (local time), Nvidia announced in its earnings report that it posted $7.64 billion (approximately 9.15 trillion KRW) in revenue for the fourth quarter of last year, a 53% increase compared to the same period the previous year. This exceeded market estimates ($7.42 billion), with Nvidia explaining that strong demand continued. Net profit also more than doubled year-over-year to $3 billion.

Specifically, the core gaming segment recorded its highest-ever revenue of $3.42 billion, up 37% year-over-year, while data center-related business revenue surged 71% year-over-year to $3.26 billion. On the other hand, automotive-related revenue declined 14% year-over-year to $125 million due to increasing supply chain constraints.

Nvidia expects first-quarter revenue this year to reach $8.1 billion, significantly surpassing market estimates of $7.29 billion. Jensen Huang, Nvidia’s CEO, explained that exceptional levels of demand are being confirmed as semiconductor usage increases in artificial intelligence (AI) and other devices. He added that Nvidia’s supply constraints are gradually being resolved and that supply volume will increase considerably in the second half of this year.

In the earnings announcement, Nvidia disclosed that it incurred $1.36 billion in operating expenses related to the failed acquisition of ARM, which was blocked by major countries’ regulatory approvals. CEO Huang said, "We did our best, but the headwinds were too strong, and we could not convince the regulators."

Following the earnings announcement after market close, Nvidia’s stock price fell more than 2% in after-hours trading compared to the previous day. Given the market’s high expectations for strong growth in semiconductor stocks, Nvidia’s results and outlook are interpreted as falling short of these expectations.

This content was produced with the assistance of AI translation services.