The results released last night beat expectations, and the company also provided stronger-than-expected guidance for the coming quarters.
The company reported a 73% increase in revenue for the fiscal fourth quarter, reaching $68.13 billion, above analysts’ expectations of $66.21 billion.
It also issued upbeat forecasts, projecting revenue of $78 billion for the fiscal first quarter, well above analysts’ expectations of $72.6 billion.
Investors worried that the surge in spending on AI hardware would be unsustainable, fueling fears of a bubble in the sector, but Nvidia’s results helped assuage those concerns.
However, these positive results were partly anticipated. Nvidia gained 1.41% on Wednesday, hitting a four-month high, while the Nasdaq closed up 1.26%. This partly explains why the market reaction to Nvidia’s results after the close remained muted.
The stock initially rose more than 4%, but then gave up those gains and was trading flat at the time of writing. It should be noted that in addition to the fact that the good results were already priced in, fears of a potential conflict between Iran and the United States also weighed on the market.
Nonetheless, Nvidia’s results clearly show that AI spending continues unabated, which is a positive sign for the entire industry, including software stocks.
Indeed, software stocks have suffered in recent weeks amid concerns that AI could make their services obsolete. However, Nvidia CEO Jensen Huang explained on the sidelines of the earnings presentation that investors’ concerns were misguided.
“I think the markets got it wrong,” Huang told CNBC, dismissing fears that AI agents would cannibalize the enterprise software sector. On the contrary, he expects many software companies to use agentic AI to improve their products and gain efficiency.
In other words, Nvidia’s results confirm that technology stocks remain an attractive opportunity for the coming months, including software stocks, which Huang believes remain potential winners despite…
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