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The first-quarter performance of NVIDIA is anticipated to reflect the continued strength of its datacenter end market. This segment is likely to have experienced substantial growth, driven by the rising demand for generative artificial intelligence (AI) and large language models that utilize NVIDIA’s Hopper and Ampere architecture graphic processing units (GPUs).
In the fourth quarter of fiscal 2024, NVIDIA recorded unprecedented revenues in its datacenter market, mainly due to heightened investments in generative AI. Datacenter revenues soared 409% year over year and 27% sequentially to $18.4 billion.
This positive trend is expected to have continued in the current quarter. Projections suggest that first-quarter revenues for the data center market may reach $20.4 billion, marking impressive year-over-year growth of 376% and a sequential rise of 11%.
The advent of OpenAI’s ChatGPT has thrust generative AI into the spotlight, signaling the start of a potential AI boom. Generative AI, supported by large language models, can produce a variety of content, including texts, images, audio and synthetic data, revolutionizing industries by modernizing workflows.
The global generative AI market size is anticipated to reach $967.6 billion by 2032, according to a new report by Fortune Business Insights. The market is expected to expand at a CAGR of 39.6% from 2024 to 2032. ChatGPT’s adoption by enterprises has shown its value across sectors such as marketing, customer service and healthcare.
The implementation of generative AI requires significant computational power and expertise, prompting enterprises to upgrade their infrastructure. NVIDIA’s next-generation chips, known for their high computing power, are well-suited for these demands.
As NVIDIA’s GPUs are used in AI models across industries like automotive, healthcare and manufacturing, the demand for its high-performance chips is projected to increase further. NVIDIA expects strong revenue growth in the first quarter of fiscal 2024, reaching $24 billion, driven by increased AI investments in the datacenter market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy). NVDA shares have soared 86.8% year to date (YTD).
The Zacks Consensus Estimate for Zscaler’s fiscal 2024 earnings has been revised 2 cents upward to $2.73 per share in the past 60 days, which suggests year-over-year growth of 52.5%. The long-term estimated earnings growth rate for the stock stands at 28.1%. The ZS stock has plunged 19.2% YTD.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2025 earnings has been revised upward by 2 cents to $3.90 per share in the past 60 days, which calls for an increase of 26.2% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 22.3%. CRWD shares have risen 35.5% YTD.
The consensus mark for Paycom’s 2024 earnings has been revised upward by 3 cents to $7.68 per share over the past 30 days, which indicates a marginal 0.9% decrease from that reported in 2023. It has a long-term earnings growth expectation of 10.4%. The PAYC stock has declined 11.8% in the YTD period.
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Datacenter End Market Demand to Aid NVIDIA's (NVDA) Q1 Earnings
NVIDIA Corporation (NVDA - Free Report) is set to announce its first-quarter fiscal 2025 results on May 22.
The first-quarter performance of NVIDIA is anticipated to reflect the continued strength of its datacenter end market. This segment is likely to have experienced substantial growth, driven by the rising demand for generative artificial intelligence (AI) and large language models that utilize NVIDIA’s Hopper and Ampere architecture graphic processing units (GPUs).
In the fourth quarter of fiscal 2024, NVIDIA recorded unprecedented revenues in its datacenter market, mainly due to heightened investments in generative AI. Datacenter revenues soared 409% year over year and 27% sequentially to $18.4 billion.
This positive trend is expected to have continued in the current quarter. Projections suggest that first-quarter revenues for the data center market may reach $20.4 billion, marking impressive year-over-year growth of 376% and a sequential rise of 11%.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
Generative AI Boom to Drive Revenues
The advent of OpenAI’s ChatGPT has thrust generative AI into the spotlight, signaling the start of a potential AI boom. Generative AI, supported by large language models, can produce a variety of content, including texts, images, audio and synthetic data, revolutionizing industries by modernizing workflows.
The global generative AI market size is anticipated to reach $967.6 billion by 2032, according to a new report by Fortune Business Insights. The market is expected to expand at a CAGR of 39.6% from 2024 to 2032. ChatGPT’s adoption by enterprises has shown its value across sectors such as marketing, customer service and healthcare.
The implementation of generative AI requires significant computational power and expertise, prompting enterprises to upgrade their infrastructure. NVIDIA’s next-generation chips, known for their high computing power, are well-suited for these demands.
As NVIDIA’s GPUs are used in AI models across industries like automotive, healthcare and manufacturing, the demand for its high-performance chips is projected to increase further. NVIDIA expects strong revenue growth in the first quarter of fiscal 2024, reaching $24 billion, driven by increased AI investments in the datacenter market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy). NVDA shares have soared 86.8% year to date (YTD).
Some other top-ranked stocks in the broader technology sector are Zscaler (ZS - Free Report) , CrowdStrike Holdings (CRWD - Free Report) and Paycom Software (PAYC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Zscaler’s fiscal 2024 earnings has been revised 2 cents upward to $2.73 per share in the past 60 days, which suggests year-over-year growth of 52.5%. The long-term estimated earnings growth rate for the stock stands at 28.1%. The ZS stock has plunged 19.2% YTD.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2025 earnings has been revised upward by 2 cents to $3.90 per share in the past 60 days, which calls for an increase of 26.2% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 22.3%. CRWD shares have risen 35.5% YTD.
The consensus mark for Paycom’s 2024 earnings has been revised upward by 3 cents to $7.68 per share over the past 30 days, which indicates a marginal 0.9% decrease from that reported in 2023. It has a long-term earnings growth expectation of 10.4%. The PAYC stock has declined 11.8% in the YTD period.
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