Nvidia earnings top estimates while chip stocks fall

Nvidia (NVDA) announced quarterly results that beat Wall Street’s expectations on the top and bottom lines, posting $39.3 billion in revenue (vs. forecasts of $38.25 billion) and adjusted earnings of $0.89 per share (vs. forecasts of $0.84 ) in its fourth quarter.
The artificial intelligence (AI) chipmaker’s CEO Jensen Huang says AI is evolving at “light speed” as Nvidia reported data center sales topping estimates and issued slightly better-than-expected first quarter guidance.
Benchmark Company managing director and senior research analyst Cody Acree joins Yahoo Finance’s Nvidia earnings special to talk about the earnings print with a focus on margins.
“It was a strong number really across the board,” Acree says of Nvidia’s figures, noting, “I think the gross margins coming in at 73.5% is key” as “that was a level threshold that they had to hit to keep investors even modestly happy.”
Looking to the next quarter, Nvidia’s gross margins outlook of 71% is “a little concerning,” the analyst says, explaining, “I think that’s indicative of more pricing pressure, more competition from AMD (AMD), and more price sensitivity at their customers as they’re investing their own dollars to create their own ASICs [application specific integrated circuits].”
Acree says increased competition and pricing pressures are “just the future that Nvidia has to live in” but highlights that “demand for their products looks to be extremely strong, and that’s really going to be the key for Nvidia going forward.”
Watch Yahoo Finance’s full Nvidia earnings special here

or catch the replay on streaming platforms at 8 pm E.T.
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