Last night, Nvidia (NVDA) – the world’s largest artificial intelligence company – reported stellar fourth-quarter earnings. And in our view, those results broadly confirmed that the AI Boom is powering forward at full speed.
Nvidia’s revenues rose more than 260% year-over-year in Q4 of fiscal 2024. That’s phenomenal growth. And in fact, its datacenter business – which includes most of its AI business – saw revenues jump more than 400% year-over-year.
Nvidia has now grown revenues by more than 100% for three straight quarters, including back-to-back quarters with >200% revenue growth.
And this trend isn’t expected to reverse anytime soon. Next quarter, management expects over 230% revenue growth.
The big driver of the huge revenue ramp at Nvidia? Unprecedented demand for its next-gen GPUs to power AI applications.
Nvidia: High Demand Turns Into Robust Revenues
On a conference call with analysts, Nvidia’s management team said that they’re seeing soaring demand for the firm’s AI chips across nearly every industry.
Internet firms are ordering Nvidia’s chips to build AI applications for content creation, shopping assistance and automated advertising.
Automotive firms are ordering its chips to incorporate AI into cars, primarily for self-driving purposes.
Pharmaceutical companies are ordering those AI chips to power computer-aided drug discovery.
Financial firms are ordering Nvidia’s AI chips to build new applications for fraud detection, customer service and trading.
It seems everyone is ordering Nvidia’s chips to build AI applications – and usher in the next wave of this AI Boom.
The Final Word
When it comes to the AI Revolution, Nvidia is the “top of the funnel,” if you will. After all, these major internet, automotive, pharma and financial firms aren’t just ordering Nvidia’s AI chips to sit on them. They’re ordering those chips to build AI applications with them.
That’s why we’re confident that what comes after this chip spending boom will be an AI application boom. That’s Wave #2 of the AI Boom.
The AI chip spending boom was Wave #1. We’re seeing that play out right now.
Wave #2 will be an AI application boom, which we’ll see play out over the next year.
So, if you’re feeling like you missed out on NVDA stock, don’t worry. The next Nvidia is likely hiding in the second wave of the AI Boom.
And fortunately, we have a few picks that could fit that bill – and absolutely soar over the next year.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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