Nvidia’s Stock Price Surges Over 12% Following AI-Driven Record Profits

By Trisha Andrada

Feb 22, 2024 06:22 AM EST

Semiconductor giant Nvidia saw its stock price surged over 12% in premarket activity on Thursday, Feb. 22, following its announcement of record results that surpassed Wall Street expectations.

In its fiscal fourth quarter, the American IT behemoth reported $22.10 billion in sales, up 265% year-on-year, with net income up 769%, thanks to the continued uptick in artificial intelligence (AI) interest. Huge AI models, like those made by Microsoft and Meta, are trained using Nvidia graphics processing units (GPUs).

(Photo : Justin Sullivan / Getty Images)
An exterior view of the NVIDIA headquarters on May 30, 2023 in Santa Clara, California.

Not Indicating Slowdown

So far, Nvidia has not seen any slowdown. Despite initial projections to the contrary, the business expects its current quarter sales to be $24 billion, as reported by CNBC.

On Wednesday, Feb. 21, Nvidia CEO Jensen Huang addressed analysts and boosted market confidence by stating that the circumstances are ideal for sustainable growth in 2025 and beyond.

H100 graphics cards used for AI training are part of Nvidia's Data Center division, which had sales of $18.4 billion in the fourth quarter, a 409% year-on-year increase.

See Also: Nvidia Becomes Third-Largest US Company After Beating Google's Alphabet in Market Cap

Numerous broker upgrades occurred on Thursday in response to Nvidia's optimistic forecast. The price targets JPMorgan and Bank of America Global Research set for Nvidia's shares were $850 and $800, respectively, with a further increase to $925.

Thursday saw Nvidia shares reach a closing price of $674.72. As investors worried that Nvidia would fall short of its ambitious targets and traders cashed out in the days leading up to the earnings announcement, share prices were under pressure. But its better-than-expected results put those worries to rest and boosted the value of rival semiconductor firms throughout the world.

See Also: Nvidia to Launch a New Slower Gaming Chip in China to Comply With US Export Controls

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