S&P 500 on the Rise: Nvidia Surprises with Results and Projections Above Expectations

Last Wednesday, the United States stock market registered an increase at the end of the day, driven by the anticipation of the financial results of Nvidia, widely valued in the artificial intelligence sector, and by the analysis of the latest minutes of the Federal Reserve, which emphasized the agency’s intention to keep interest rates stable for longer.

The S&P 500 index showed a slight increase, exceeding 0.1%, while the Dow Jones Industrial Average saw similar growth, increasing around 0.1%, which represents an increase of approximately 50 points. On the other hand, the Nasdaq Composite, focused on technology companies, did not follow the same path and registered a drop of 0.3%, continuing the downward trend that began on Tuesday.

Nvidia, a giant in the technology and chip sector, recently released its fourth quarter financial results, which not only positively surprised the market but also exceeded analysts’ projections.

The company announced adjusted earnings per share (EPS) of $5.16, with revenues totaling an impressive $22.1 billion, exceeding expectations that revolved around an EPS of $4.60 and revenues of $ 20.4 billion. This performance marks a significant jump compared to the same period last year, when Nvidia reported an EPS of $0.88 and revenue of $6.1 billion. In annual terms, Nvidia closed 2022 with revenues of US$27 billion.

Looking ahead, Nvidia also optimized expectations for the first quarter, projecting revenues of around US$24 billion, with a margin of error of 2%, while Wall Street forecasts were around US$21, 9 billion. The company’s shares reacted positively to this news, registering an increase of more than 5% after the results were announced.

Jensen Huang, CEO of Nvidia, highlighted the growing demand for accelerated computing and generative artificial intelligence as an inflection point for the company. “Our data center platform is being driven by increasingly diverse demand, ranging from data processing to training and inference by large cloud service providers and companies specializing in GPUs,” said Huang.

However, not everything was positive in Nvidia’s report. The company cited a “significant” slowdown in revenue from its data center in China, attributed to new licensing requirements imposed by the United States, which limit the sale of certain chips to the Asian country. Despite this, Nvidia’s data center segment, crucial to its operations, reported revenues of US$18.4 billion, exceeding expectations.

Nvidia faces challenges including fierce competition from rivals such as AMD and Intel, as well as the tendency of large companies such as Amazon and Google to develop their own AI chips. However, Nvidia is not inactive in the face of these challenges, having met with large technology companies to discuss the creation of personalized chips.

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