Source: Times Weekly Author: Guo Meiting

On February 22, A- share AI-related concepts fell into a collective "carnival". Artificial intelligence, east-west calculation, AI calculation index, IDC calculation, lithography machine, cloud computing and other indexes rose, the increase is close to or more than 5%.

And the trigger behind the share price surge is the report card of the chip giant Nvidia on the other side of the ocean.

after the U.S. stock market on February 21, Nvidia (Nasdaq:NVDA) released its fourth-quarter financial report for the 2024 fiscal year ended January 28. The net profit for the 2024 fiscal year was nearly 30 billion U.S. dollars, and the net profit for the fourth quarter increased year-on-year. More than 7 times.

after the financial report was released, NVIDIA's share price rose more than 10% after the market, and finally the increase remained at about 9.08.

In this earnings conference call, Nvidia also announced the relevant situation on the Chinese market. Huang Renxun, founder and chief executive of Nvidia, said that although Nvidia has not yet obtained a license from the US government to ship restricted products to China, Nvidia has begun to ship alternative products that do not require a license to China and will "do its best to join the competition in the Chinese market".

Net profit "wild" 7 times

Nvidia's performance report shows that for the fourth quarter ended January 28, 2024, revenue was $22.1 billion, up 22% from the previous quarter and 265 from the same period last year, net profit was $12.285 billion, up 33% from the previous quarter, up 769 from the same period last year, and GAAP diluted earnings per share was $4.93.

In fiscal 2024, Nvidia's revenue increased by 126 to $60.9 billion, net profit of $29.76 billion, up 581 percent year-over-year, and GAAP diluted earnings per share of $11.93. Financial data exceeded previous performance guidelines.

At the same time, the company is guiding its results for the next quarter, forecasting sales of $24 billion in the first quarter of fiscal 2025, up or down 2%, well above Wall Street expectations of $22.12 billion. GAAP and non-GAAP gross margins are expected to be 76.3 percent and 77.0 percent, respectively, with 50 basis points of upward or downward movement.

By business, Nvidia's core data center business hit a record high again in the fourth quarter, reaching $18.4 billion billion, up 27 percent month-on-month and 409 percent year-on-year. The business earned $47.5 billion million in the full fiscal year, also a record.

"Accelerated computing and generative AI have reached a tipping point. Demand is surging across companies, industries and countries around the world." Huang said that at present, the overall supply situation is improving, but still faces shortages. Due to the hot orders, supply constraints will continue throughout the year.

in addition, NVIDIA's gaming business had fourth-quarter revenue of $2.9 billion, the same as the previous quarter, up 56% year-on-year, and full-year revenue up 15% to $10.4 billion. Professional visualization business revenue in the fourth quarter was $0.463 billion, up 11% from the previous quarter, up 105 from the same period last year, and full-year revenue up 1% to $1.6 billion. Automotive revenue in the fourth quarter was $0.281 billion, up 8 percent from the previous quarter and down 4 percent from a year earlier, full-year revenue rose 21 percent to $1.1 billion billion.

Nvidia shares closed at $674.72 on February 21, down 2.85 percent, giving a total market value of $1.67 trillion. After the financial report was released, the company's after-hours share price rose more than 10%, as of press time, the share price rose 9.08 percent.

Domestic related concept stocks have also been greatly boosted by NVIDIA's stronger-than-expected earnings. At the close of trading on February 22, the-share east-west calculation, AI calculation power index, IDC calculation power, lithography machine, cloud computing and other indexes rose sharply, up more than 5%.

as of the close of trading on February 22, copper bull information (300895.SZ27) rose 20.00 percent, yimikang (300249.SZ6) rose 19.96 percent, capital online (300846.SZ) rose 17.69 percent, cambrian-U(688256.SH) rose 9.88 percent, yunsai zhilian (600602.SH) rose 10.05 percent, wave information (000977.SZ) rose 5.12 percent, shewang (8.36), shewang (), etc.).

in February this year, capital online said on the investor interaction platform that the company has invested a certain number of Avida GPU chips since 2022, including more than 10 models such as A100, H800, A5000 and 4090, and has established a safe inventory water level according to customer needs. At the same time, the company has established good cooperative relations with a number of domestic and foreign server chip manufacturers, and will actively seek high-quality strategic partners according to the company's development needs in the future.

Tongniu Information said on the investor interaction platform in August last year that the company had purchased Nvidia products for research and development projects.

However, although many listed companies have gone up with the gimmick of "NVIDIA concept stocks", NVIDIA still has a certain barrier to the Chinese market.

"Do your best to join the Chinese market"

In this earnings conference call, Nvidia also announced the relevant situation on the Chinese market.

Nvidia CFO Kress said on the earnings call that in the fourth fiscal quarter, the Chinese market accounted for a single-digit percentage of Nvidia's data center revenue and is expected to remain in a similar range in the next fiscal quarter.

But in the second quarter earnings call in 2023, Nvidia said that most of the company's AI chip demand still comes from China, and Chinese buyers account for nearly 1/4 of the total revenue of data center products.

On October 18 last year, the United States updated its export control regulations and imposed new graphics card sanctions on certain countries, including China, including but not limited to A100, A800, H100, H800, L40, L40S, and consumer flagship model RTX 4090.

Since then, revenues from the Chinese market have fallen sharply.

Wu Quan, president of Huaxin Jintong Semiconductor Industry Research Institute, made a relatively exaggerated analogy: "If the Chinese market is not considered, Nvidia may grow by 100, and with the Chinese market, the growth may reach 200."

So China is still a very attractive market for Nvidia.

Nvidia said it had begun supplying a small number of alternative products to the Chinese market. After the U.S. government enacted new export control regulations in October last year, the company's data center revenue from China has dropped significantly. At present, the company has not obtained a license from the U.S. government to ship restricted products to China, but Nvidia has begun to ship to China. Regional shipping does not require a license to replace products.

Huang Renxun said that Nvidia has responded to the U.S. government's export restrictions against China, and has taken the time to introduce adjusted alternative products. It has begun to supply samples to Chinese customers and will "do its best to join the Chinese market under the premise of complying with export restrictions. Competition and hope to succeed".

Chen Wei, former chief scientist of artificial intelligence NLP enterprise and chairman of Qianxin Technology, told Times Weekly that at present, the demand for computing power in China continues to rise, and the gap in computing power in the middle is largely filled by IDC and GPGPU inventory at home and abroad (the last round of GPGPU shortage resulted in a large amount of domestic stock).

According to a number of industry insiders, although there is no particularly perfect alternative to Nvidia, there are still many opportunities for domestic AI chips.

Wu Quan believes that the performance of some domestic enterprises' self-developed chips may already be comparable to some of Avida's chips. The current gap lies more in the popularity of ecology, and performance is only one of the dimensions. "It can be said that Avida's 'Ping Ties' program is initially available in China and still needs time to develop."

With the leap-forward development of generative AI, the demand for computing power will further explode in the future, and chips will be the darling of the market for a long time in the future.

Huang Renxun predicts: "The scale of data center infrastructure in the future will double in five years, representing a market opportunity of hundreds of billions of dollars per year."

driven by Avida's bright-eyed earnings report, as of press time, the semiconductor sector U.S. stocks rose before the market, Chaowei Semiconductor rose more than 6%, applied materials rose more than 4%, Micron Technology rose more than 2%, Avida rose 12% before the market.