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NVIDIA Corporation


Wall street consensus:


​Recent Conference Call

### NVIDIA Corporation FQ4 2024 Earnings Call Summary

#### Insightful Quote from the CFO
"The world has reached a tipping point of a new computing era. The trillion-dollar installed base of Data Center infrastructure is rapidly transitioning from general purpose to accelerated computing." - Colette M. Kress, Executive VP & CFO.

#### Key Quarterly Business Trends
1. **Data Center Dominance**: NVIDIA's data center revenue showcased tremendous growth, driven by the demand for the NVIDIA Hopper GPU computing platform and InfiniBand end-to-end networking. The company's success in this sector is attributed to the widespread adoption of AI across various industries, affirming the pivotal role of accelerated computing in modern data infrastructure.

2. **Generative AI Adoption**: The utilization of generative AI and large language models across diverse sectors such as automotive, healthcare, and financial services indicates a growing reliance on NVIDIA's AI infrastructure. This trend underscores NVIDIA's significant impact on enabling AI-driven innovations and efficiencies in multiple industries.

3. **Global Supply and Demand Dynamics**: Despite challenges in the Chinese market due to U.S. government export controls, NVIDIA maintained a robust performance elsewhere, with growing adoption of their AI solutions globally. The company's strategy to introduce alternative products for the Chinese market signifies adaptability in navigating geopolitical and regulatory landscapes.

#### Critical Questions from Analysts

1. **Growth Expectations and Diversification (Toshiya Hari, Goldman Sachs)**: Analysts inquired about NVIDIA's expectations for data center business growth and diversification into software and sovereign AI. **Response**: NVIDIA anticipates continued growth, driven by accelerated computing's transition and the generative AI revolution. The company's efforts in software services and adjusting to geopolitical constraints were highlighted as strategic moves to capture emerging opportunities.

2. **Supply Constraints (Stacy Rasgon, Bernstein Research)**: Concerns were raised about potential supply constraints with new product generations. **Response**: NVIDIA acknowledged initial challenges in matching supply with demand for new products but emphasized overall improvement in supply chain conditions and efforts to fairly allocate resources.

3. **Software Business Dynamics (Harsh Kumar, Piper Sandler)**: Analysts sought clarity on the structure and growth drivers of NVIDIA's software business. **Response**: NVIDIA's software business, propelled by the AI Enterprise suite, is poised for significant growth. It caters to the need for optimized AI operations across industries, offering a comprehensive platform that extends NVIDIA's reach beyond hardware.

#### Outlook or Guidance
NVIDIA projects a revenue of $24 billion for the first quarter of FY 2025, indicating an optimistic outlook driven by data center and professional visualization segments. The anticipated adjustment of gross margins to mid-70s reflects a normalization after a period of favorable component costs. Continued investments in growth opportunities and strategic management of supply chain and market challenges underscore NVIDIA's adaptive and forward-looking approach to sustaining its leadership in accelerated computing and AI technologies.

This summary provides a concise overview of NVIDIA's financial performance and strategic direction

Key Questions to follow

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