Nvidia Beats Out Expectations in Q4 Report but Sees Stock Dip as Company Fumbles Cryptocurrency Play

By Thomas Price Thursday, February 25, 2021

Tech company Nvidia has reported an incredibly lucrative Q4 built on the backs of the boost in popularity the entire gaming industry has seen over the past few years. With their graphics cards proving to be the hottest in the business, the company has seen strong revenues even amidst the global semiconductor shortage. Despite the strong performance, Nvidia shares have fallen in pre-market trading after uneasiness from lack of ability to maintain stock of graphics cards and announcement of cryptocurrency-focused cards.

Nvidia headquarters in California.

Nvidia Earnings vs. Expectations

In Nvidia’s Q4 report, the tech company earned an impressive $5 billion. This revenue figure is a 61% increase in business from the same quarter in 2019, showing the immense growth the company has undergone recently. The company also beat out analyst predictions for the quarter, with the expectations for the revenue in the quarter standing at $4.82 billion. The business also reported a strong earnings per share of $3.10, a growth of 64% from Q4 in 2019. This figure also beat out expectations from analysts who only projected earnings of $2.81 per share.

A large portion of Nvidia’s success in the year comes from the company tapping into the popularity of PC gaming over the past year. With the COVID-19 pandemic keeping more people inside, PC gaming became a major entertainment outlet. In fact, the company saw their gaming sector outpace their overall growth, seeing this portion of the business grow 67% from the same quarter last year.

However, a major area of concern has been the ability of Nvidia to keep up with the business demands for their graphics cards. The tech company has not been able to keep enough graphics cards in stock over the course of the quarter and that issue does not look to change in the near future.

Nvidia’s Future Outlooks and Stock Market Response

Nvidia’s guidance for 2021 remained equally uplifting as the company expects business to continue to grow. In fact, the company is predicting 2021 Q1 revenues to reach around $5.2 billion, well above most analyst projections of $4.51 billion. Despite the good news, Nvidia’s stock has been down in pre-market trading by over 2.5%.

Much of this is due to the announcement that the cryptocurrency-focused graphics cards that had generated a lot of excitement would not play a large part in the business moving forward. Many investors also hold fears over the ability of the business to maintain stock of graphics cards and other pieces of tech amongst the semiconductor shortage moving forward as Nvidia has already shown issues with this in Q4.

In a statement released with the earnings report, founder and CEO of the tech business, Jensen Huang, said, “Q4 was another record quarter, capping a breakout year for NVIDIA’s computing platforms. Our pioneering work in accelerated computing has led to gaming becoming the world’s most popular entertainment, to supercomputing being democratized for all researchers, and to AI emerging as the most important force in technology.”

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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