Nvidia, known for its AI chips, continued its relentless upwards climb in February. The surge was fueled by the growing demand for AI infrastructure, coupled with Nvidia’s impressive earnings report that surpassed all expectations.
According to data from S&P Global Market Intelligence, Nvidia’s stock soared by 28.6% in February. The stock saw early gains in the month driven by the buzz surrounding AI chips, and after a slight dip, it skyrocketed following the earnings release on Feb. 21.
Analysts Underestimating Nvidia
Throughout the first half of the month, Nvidia’s shares climbed as other AI companies like Meta Platforms and Arm Holdings posted strong earnings, indicating a continued robust interest and demand in AI technology. Additionally, Nvidia’s announcement of a new venture targeting custom AI chips for cloud computing companies strengthened its competitive edge.
Nvidia also received a series of price target increases from Wall Street analysts, reflecting a highly bullish sentiment on the stock.
A note from Wells Fargo on Nvidia’s peer, Super Micro Computer, briefly dampened the AI rally. However, Nvidia’s stock surged after its outstanding earnings report, with revenue shooting up by 265% to $22.1 billion, surpassing estimates of $20.4 billion. Notably, data center revenue soared by 409% to $18.4 billion, while adjusted earnings per share rose by 486% to $5.16, beating the consensus of $4.60.
The company’s guidance for the upcoming quarter was equally impressive, forecasting $24 billion in revenue, well above the $21.9 billion consensus, and indicating an expansion in margins.
Image source: Nvidia.
The Ascension Continues
In March, Nvidia didn’t slow down as another positive report in the sector, this time from Dell Technologies, spurred a further rise. The AI boom shows no signs of waning, with Nvidia firmly positioned at the forefront.
Expect Nvidia to scale greater heights in the forthcoming months as cloud infrastructure companies scramble to enhance their AI capabilities.
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Published on: *Stock Advisor returns as of February 26, 2024