NVIDIA's highly anticipated earnings report for the first quarter of 2024 not only allowed the firm to maintain its triple digit revenue growth but also caused its share price to cross the coveted $1,000 mark in after market trading today. NVIDIA reported $26 billion in revenue during this year's first quarter, and its earnings report saw Q1 earnings per share and revenue guidance for Q2 surpass analyst estimates. Immediately after the release, NVIDIA's shares soared but then dithered as investors digested the results. The after market unease was resolved as the earnings conference call started, and soon afterward, the shares went on to touch $1,016 before paring back to $1,006.
NVIDIA's Stock Holds After Market Gains To Cros $1,000 After Strong First Quarter Earnings Report
Building on her official comments in the earnings release at market close, NVIDIA CFO Collette Kress shared additional details about the firm's A.I. partnerships in the industry at the firm's earnings call. According to her, NVIDIA's sequential Data Center growth was driven by "all customer types, with enterprise and consumer internet companies leading the way.
Kress also carefully mentioned the 'rental' cloud market, which she believes can help its customers recover some of the costs of buying its chips. She stated that for "every one dollar spent on NVIDIA AI infrastructure, cloud providers have an opportunity to earn five dollars in GPU instant hosting revenue over four years." Costs were a key part of the NVIDIA CFO's opening remarks, as she stressed that for cloud rental customers, NVIDIA's products "offer the best time to train model. The lowest cost to train model. And the lowest cost to inference large language model."
She also shared some of the customers using NVIDIA's products for artificial intelligence. These include OpenAI, Amazon partner Anthropic, Google's Deep Mind, Elon Musk's xAI, Cohere, Meta and Mistral.
Kress also mentioned Tesla, sharing that her firm had expanded Tesla's expansion of its A.I. training to 35,000 H100 GPUs. According to her, NVIDIA's products were crucial in driving forward Tesla's growth, and the firm expects "automotive to be our largest enterprise vertical within data center this year " for a multi billion dollar revenue opportunity.
Meta's Llama 3 is trained on clusters of 24,000 NVIDIA H100 GPUs, shared the NVIDIA CFO. She also revealed that Microsoft backed OpenAI's GPT-4o demo last week was powered by NVIDIA's H200. The first H200 system was personally delivered by NVIDIA CEO Jensen Huang to the OpenAI team, and Kress believes that the H200 'nearly doubles' the inference performance of H100" to increase production deployment value.
This value has been a key concern on Wall Street, as investors worry about the timeline for profits from heavy A.I. spending. Kolette used Meta's Llama 3 as an example to share how A.I. providers can generate revenue.
According to her projections:
For example, using Llama 3, with 700 billion parameters, a single NVIDIA HGX H200 server can deliver 24,000 tokens per second, supporting more than two thousand four hundred users at the same time. That means, for every one dollar spent on NVIDIA HGX H200 servers at current prices per token, an API provider serving Llama 3 tokens can generate seven dollars in revenue over four years.
After the earnings call ended and the market settled, NVIDIA's shares were almost trading below the $1,000 mark. They were trading at $1,002 at 6:21 p.m. ET, and based on yesterday's closing price, the stock is up by 209% over the past 12 months.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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