Nvidia (NASDAQ:NVDA) The stock price soared 82.5% in the first quarter of 2024. (U.S. financial markets were closed on Friday for the Good Friday holiday, so the market's quarter ended on Thursday.) That performance made the artificial intelligence (AI) chip leader the second-best performing company. .in S&P500 Index, rear only super microcomputeris a server specialist that is also benefiting from strong demand for AI products and services.
For context, while the S&P 500 rose 10.2% in the first quarter and hit an all-time high at Thursday's close, tech-heavy stocks Nasdaq Composite The index rose 9.1%.
Biggest catalyst for Nvidia stock: AI, especially generated AI
The main catalyst behind Nvidia stock's incredible performance so far in 2024 can be summed up in two words. That is artificial intelligence. Specifically, generative AI, which greatly expands the potential applications of AI. This technology allows users to quickly generate different types of new content based on different input categories such as images and audio.
Generative AI captivated the tech world when OpenAI widely released ChatGPT in November 2022. The chatbot's popularity has skyrocketed, leading to a frenzy of companies and other entities trying to acquire generative AI capabilities.
Nvidia data centers: Platforms that will primarily benefit from strong demand for AI capabilities
Nvidia's data center platform primarily benefits from strong demand among enterprises of all types to acquire generative AI capabilities. The data center is his Nvidia's largest platform and accounted for 83% of his total revenue for the quarter ended Jan. 28. This business is growing rapidly, as shown by the numbers below.
Nvidia's data center graphics processing units (GPUs) accelerate processing of AI and high performance computing workloads. The company's current flagship data center GPU is the H100, and its next Hopper architecture-based GPU, the H200, is expected to begin shipping in the second quarter of this year. Data center GPUs based on the company's next-generation architecture, Blackwell, promise significant performance improvements and are expected to launch later this year.
Nvidia stock enters 2024 with momentum
In 2023, Nvidia's stock price soared 239%, earning it the No. 2 spot among the top stocks in the S&P 500 Index. (Supermicrocomputers were the best performers with his 246% gain.) For context, the S&P 500 and Nasdaq Composite returned 26.3% and 44.6%, respectively, last year.
Nvidia stock's momentum from the end of 2023 to the end of February 2024 was driven by the blockbuster quarterly results announced by the company on November 23, 2023. For the third quarter of fiscal 2024 (ending October 29, 2023), Nvidia's revenue and adjusted earnings per share (EPS) increased 206% and 593%, respectively, compared to the same period last year. Growth was driven by a 279% year-over-year jump in data center platform revenue.
From 2024 to February 21, the day the company releases its next quarterly results, NVIDIA's stock price rose 36.2%.
NVIDIA stock rises after quarterly earnings announcement on February 21st
On February 21st, Nvidia released its fourth quarter fiscal 2024 report (ending January 28th). This was another blockbuster report fueled by his incredible AI-driven growth in data center platforms.
For the quarter ended January 28, Nvidia's revenue and adjusted EPS increased 265% and 486%, respectively, year over year. Both results easily beat Wall Street expectations. Growth was driven by his 409% increase in data center platform revenue. Gaming platforms and professional visualization platforms also performed well, with revenue up 56% and 105% year over year, respectively.
Investors drove the stock price up 16.4% the day after the earnings release, and the stock price continued to rise until the end of the first quarter of 2024.
Nvidia is poised for even more incredible growth
Nvidia is poised to deliver another impressive quarterly report. Management directed revenue to increase 234% year-over-year and adjusted EPS to increase 396% for the period ending in late April.
The AI revolution is in its early stages, so Nvidia may have a very long road ahead of it. It's not too late to consider buying Nvidia stock.
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Beth McKenna holds a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
Nvidia stock soars 82.5% in first quarter of 2024 — What's moving major AI stocks originally published by The Motley Fool
