Nvidia (NVDA), the world’s leading artificial intelligence (AI) company, recently announced its impressive fourth-quarter earnings. These results, in our opinion, serve as a testament to the ongoing momentum of the AI revolution.
The company’s revenues for Q4 of fiscal 2024 skyrocketed by over 260% compared to the previous year. This remarkable growth is primarily attributed to its datacenter business, which encompasses most of its AI operations, and saw revenues surge by over 400% year-over-year.
“Nvidia has now grown revenues by more than 100% for three straight quarters, including back-to-back quarters with >200% revenue growth.”
The company’s upward trajectory doesn’t seem to be slowing down. Management anticipates over 230% revenue growth for the next quarter. The primary catalyst for this significant revenue increase? The unprecedented demand for Nvidia’s next-generation GPUs, which are integral to powering AI applications.
During a conference call with analysts, Nvidia’s management team reported a surge in demand for the company’s AI chips across a wide range of industries.
“Internet firms are ordering Nvidia’s chips to build AI applications for content creation, shopping assistance and automated advertising.”
Automotive companies are utilizing these chips to integrate AI into vehicles, primarily for autonomous driving. Pharmaceutical firms are leveraging these AI chips for computer-aided drug discovery. Financial institutions are employing Nvidia’s AI chips to develop new applications for fraud detection, customer service, and trading.
It appears that companies across various sectors are turning to Nvidia’s chips to build AI applications, thereby propelling the next phase of the AI revolution.
In the context of the AI revolution, Nvidia can be considered the “top of the funnel.” Major internet, automotive, pharmaceutical, and financial firms are not merely purchasing Nvidia’s AI chips for storage. They are actively using these chips to build AI applications.
“That’s why we’re confident that what comes after this chip spending boom will be an AI application boom. That’s Wave #2 of the AI Boom.”
The current surge in AI chip spending, or Wave #1, is evident. We anticipate that Wave #2, the AI application boom, will unfold over the next year.
So, if you’re regretting not investing in NVDA stock, fret not. The next big opportunity is likely lurking in the second wave of the AI Boom. We have a few potential picks that could fit the bill and potentially skyrocket over the next year.
Let us know what you think, please share your thoughts in the comments below.
