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· Posted on
February 26, 2024

Nvidia smashes its lofty revenue expectations because the nerds are nerding... and willing to pay the big bucks for it

Analysts expected a 240% increase in Nvidia's revenue, but it smashed these targets by pumping up revenue by 265% from just a year ago.

What's the key learning?

  • Microsoft, OpenAI, Amazon, Meta, and Google are all desperate to get their nerdy hands on these AI chips, and because of that, Nvidia's revenue and demand has become a bellwether.
  • A bellwether stock is a company that is considered a leading indicator of an economic trend.
  • It's clear from these earnings that the AI-gold-rush ain't slowing down any time soon.

👉 Background: Nvidia has been around since 1993 when it developed 3D graphic chips for games.

👉 What happened: More recently, Nvidia has been producing the specialised AI chips for AI tools. As a result, Wall Street investors have come to expect enormous growth from. In fact, analysts expected a 240% increase in its revenue, but Nvidia smashed these targets by pumping up revenue by 265% from just a year ago.

👉 What else: Microsoft, OpenAI, Amazon, Meta, and Google are all desperate to get their nerdy hands on these AI chips. And because of that, Nvidia's revenue and demand has become a bellwether for overall interest in the AI industry.

What's the key learning?

💡A bellwether stock is a company that is considered a leading indicator of an economic trend.

💡Right now, there is a race to release new AI products and features (Think: Alibaba, Microsoft, OpenAI, Meta, and Google). But, it's clear from these earnings that the AI-gold-rush ain't slowing down any time soon.

💡There are bellwether stocks in many industries. For example, in the luxury fashion industry, LVMH is considered a bellwether stock too. When LVMH reported a 10% jump in its 4th quarter earnings, the shares of rivals Kering and Richemont also jumped.

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