Nvidia is sporting growth one tech CEO says hasn't been seen 'in the history of capitalism'

By Emily Bary

Nvidia's stock gains Thursday likely relate more to its commentary than its numbers. But those numbers are still pretty staggering.

Nvidia Corp. is winning plenty of praise for its latest quarterly report, which in the words of Melius Research analyst Ben Reitzes "had no real negatives."

And as Nvidia shares (NVDA) move 10% higher in Thursday morning action, the company's most recent set of knockout numbers don't even seem to be the driver behind that movement. Rather, Wall Street seems encouraged about what's to come for Nvidia, especially with the company's new Blackwell chip line in full production.

That sort of talk was the "highlight of the call," according to Piper Sandler analyst Harsh Kumar, who noted that Nvidia is looking to ramp Blackwell in the October quarter before full-scale deployments take place in the January quarter.

But it's still worth giving attention to Nvidia's numbers themselves. The chip company's gangbusters stock performance - up 92% so far this year and up 209% over 12 months - means expectations have risen quite a lot, so much so that revenue for the April quarter of $26.0 billion, up 262% on a year-over-year basis, was merely in line with what the buy side was looking for.

TD Cowen analyst Matthew Ramsay took a moment to recognize just how far Nvidia has come in a year. Nvidia's artificial intelligence-fueled frenzy kicked off in earnest during last year's July quarter, and at this point in 2023, the company shocked Wall Street with its projection that quarterly revenue for that period could be a record $11 billion. Now, Ramsay noted, its guidance calls for 2.5 times that figure.

More staggering numbers could come down the line: Ramsay now models more than $100 billion in data-center revenue for fiscal 2025, and the consensus view is there as well. For context, Nvidia saw $10.6 billion in data-center revenue in fiscal 2022, $15.0 billion in fiscal 2023 and $47.5 billion in fiscal 2024. The company's fiscal year ends in January.

The head of at least one fellow technology company showed respect for Nvidia's rapidly expanding financials. Box Inc. (BOX) Chief Executive Aaron Levie remarked that Nvidia's ability to post $22.6 billion in quarterly data-center revenue, after having seen just $4.3 billion a year before, is simply one-of-a-kind growth.

And there's one other number to mind: the stock's multiple. Nvidia shares "remain relatively inexpensive (35x on forward earnings that are going up again today) with a narrative that is clearly nowhere near its end, and likely nowhere near its peak," Bernstein analyst Stacy Rasgon wrote.

-Emily Bary

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05-25-24 0949ET

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