Should You Buy Nvidia Stock After Its Blowout Q4 Results?

Core Viewpoint - Nvidia's Q4 2024 performance exceeded expectations, showcasing strong revenue growth and earnings, but concerns about slowing growth and margins were noted [1][2][3][4]. Financial Performance - Nvidia reported Q4 revenue of $39.33 billion, a 78% year-over-year increase and 12% higher than the previous quarter, surpassing the company's guidance of $37.5 billion and analyst estimates of $38.05 billion [1]. - Adjusted earnings for Q4 were $0.89 per share, reflecting a 71% year-over-year increase and a 10% rise from Q3, exceeding the consensus estimate of $0.84 per share [2]. - Data center revenue reached a record $35.6 billion, up 93% year-over-year and 16% sequentially, accounting for nearly 91% of total revenue [2]. Growth Trends - Despite strong performance, Nvidia's growth rate is showing signs of slowing, with Q3 revenue growth at 94% and Q2 at 122% [3]. - Gross margins decreased by 3% year-over-year in Q4 to 73% [3]. Future Outlook - Nvidia's guidance for Q1 of fiscal 2026 is $43 billion, which is below the average analyst estimate of $43.37 billion, indicating a potential further decline in growth rate [4]. - The projected adjusted gross margin for Q1 is 71%, continuing a downward trend [5]. Market Position and Strategy - Nvidia's CEO highlighted the increasing demand for computing power in AI, stating that future models may require significantly more power than current ones, suggesting a strong market position in AI chips [7]. - The company is expected to recover margins with the launch of new Blackwell chips, which could lead to continued growth [6].