Believe It or Not, Nvidia Stock (NASDAQ:NVDA) Still Isn’t Expensive

Chipmaker and AI prodigy Nvidia (NASDAQ:NVDA) continues its unstoppable upward journey, having more than tripled in value in 2023 and up about 78% year-to-date. The recent Q4 beat was spectacular and drove NVDA to its all-time highs. Being at the helm of the AI revolution, my bullish stance on NVDA remains. I am confident in its long-term potential for growth, driven by the artificial intelligence (AI) boom and its relatively favorable valuation. Hence, I will buy the stock at current levels.

NVDA Posts Blowout Q4 Earnings Yet Again

Now the third largest company in the world, Nvidia posted yet another blowout Q4 result on February 21, driven by accelerated computing and generative AI momentum. Adjusted earnings of $5.16 per share handily beat the analysts’ estimates of $4.59 per share. Also, the figure came in much higher (+486%) than the Fiscal Q4-2023 (ended January 2023) figure of $0.88 per share.

Impressively, Q4 revenue jumped 265% year-over-year to $22.1 billion, surpassing the consensus estimate of $20.5 billion. On top of that, its adjusted gross margin expanded 10.6 percentage points to 76.7% from 66.1% a year ago.

Importantly, NVDA’s crown-jewel segment, Data Center revenues, more than trebled year-over-year to $47.5 billion in Fiscal 2024. Q4 revenues for the segment also saw remarkable growth, increasing by 409% year-over-year to $18.4 billion.

As expected, revenues declined in China due to the U.S. export control restrictions. During the earnings call, management affirmed that China represented only a mid-single-digit percentage of Data Center revenue in Q4 versus 20-25% on an average basis over the last few quarters.

Looking ahead, the Q1 guidance appears promising, with revenues expected to hover around $24 billion. Adjusted gross margins are forecasted to be around 77%.

Exuberating great optimism for the future, CEO Jensen Huang commented during the call, “We’re at the beginning of two industry-wide transitions and both of them are industry-wide. The first one is a transition from general to accelerated computing… [and] a second…

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