Nvidia Does It Again

All those worrywarts can relax. Nvidia did it again. The AI chip giant reported fourth quarter revenue of $22 billion, $2 billion ahead of its projection, and 265% higher than a year earlier. Even better, Nvidia projected its first quarter revenue would be $24 billion, indicating that growing competition is not yet doing much to dent its rocketship-like growth. The first quarter revenue projection implies growth from a year earlier of 234%.

Nvidia stock, which had sold off in recent days on anxieties about earnings, jumped 8% to $729, nearly regaining all the ground it had lost. Nvidia is now gushing cash like a North Sea oil rig. Free cash flow hit $26.9 billion in the fiscal year ended Jan. 31—more than Nvidia had generated in the previous five years combined. At this rate, Nvidia will have to think about what it does with the cash that is now piling up on its balance sheet. The company already buys back stock—it spent $9.5 billion on buybacks in fiscal 2023, down just a bit on fiscal 2022 despite the runup in its stock price—and pays a small dividend. So what else can it do with the money?