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NVIDIA’s third-quarter fiscal 2024 performance is likely to reflect the continued strength of its Datacenter business. The Datacenter end-market business is likely to have mostly benefited from the growing demand for generative artificial intelligence (AI) and large language models using GPUs based on NVIDIA Hopper and Ampere architectures.
The company’s second-quarter fiscal 2024 performance reflected record revenues across its data center end market, which mainly benefited from growing investments in generative AI. In the last reported quarter, its revenues from the Datacenter business jumped 171% year over year and 141% sequentially.
We believe that the trend is likely to have continued in the to-be-reported quarter. Our third-quarter revenue estimate for the data center end market is pegged at $12.5 billion, implying year-over-year growth of 226% and a sequential increase of 21%.
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.
The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications. The global generative AI market size is anticipated to reach $667.96 billion by 2030, according to a new report by Fortune Business Insights. The market is expected to expand at a CAGR of 47.5% from 2023 to 2030.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. During the first-quarter fiscal 2024 earnings conference call, the company’s CEO, Jensen Huang, already stated that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
NVIDIA currently sports a Zacks Rank #1 (Strong Buy). Shares of NVDA have surged 239.5% year to date (YTD).
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has been revised by 9 cents northward to 42 cents per share in the past 30 days. For 2023, earnings estimates have increased by 28 cents to 89 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being 136.3%. Shares of INTC have rallied 63.7% year to date.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has been revised upward by 14 cents to $1.49 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 5 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being -32.3%. Shares of AZPN have declined 10.6% year to date.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has been revised upward by 9 cents to 35 cents per share in the past 30 days. For 2023, earnings estimates have increased by 19 cents to $1.51 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of Datadog have soared 48.5% year to date.
Image: Shutterstock
GenAI Boom-Led Chip Demand to Aid NVIDIA's (NVDA) Q3 Earnings
NVIDIA Corporation (NVDA - Free Report) is slated to report third-quarter fiscal 2024 results on Nov 21.
NVIDIA’s third-quarter fiscal 2024 performance is likely to reflect the continued strength of its Datacenter business. The Datacenter end-market business is likely to have mostly benefited from the growing demand for generative artificial intelligence (AI) and large language models using GPUs based on NVIDIA Hopper and Ampere architectures.
The company’s second-quarter fiscal 2024 performance reflected record revenues across its data center end market, which mainly benefited from growing investments in generative AI. In the last reported quarter, its revenues from the Datacenter business jumped 171% year over year and 141% sequentially.
We believe that the trend is likely to have continued in the to-be-reported quarter. Our third-quarter revenue estimate for the data center end market is pegged at $12.5 billion, implying year-over-year growth of 226% and a sequential increase of 21%.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
GenAI Boom to Drive the Top Line
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.
The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications. The global generative AI market size is anticipated to reach $667.96 billion by 2030, according to a new report by Fortune Business Insights. The market is expected to expand at a CAGR of 47.5% from 2023 to 2030.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. During the first-quarter fiscal 2024 earnings conference call, the company’s CEO, Jensen Huang, already stated that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
NVIDIA currently sports a Zacks Rank #1 (Strong Buy). Shares of NVDA have surged 239.5% year to date (YTD).
Some other top-ranked stocks from the broader technology sector are Intel Corporation (INTC - Free Report) , Aspen Technology, Inc. (AZPN - Free Report) and Datadog, Inc. (DDOG - Free Report) . Intel and Aspen each sport Zacks Rank #1, while Datadog carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has been revised by 9 cents northward to 42 cents per share in the past 30 days. For 2023, earnings estimates have increased by 28 cents to 89 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing on one occasion, the average surprise being 136.3%. Shares of INTC have rallied 63.7% year to date.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has been revised upward by 14 cents to $1.49 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 5 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being -32.3%. Shares of AZPN have declined 10.6% year to date.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has been revised upward by 9 cents to 35 cents per share in the past 30 days. For 2023, earnings estimates have increased by 19 cents to $1.51 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of Datadog have soared 48.5% year to date.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.