Nvidia's stock sees only marginal gains after better-than-expected results. Here's the latest

Nvidia's stock rose by 1.3% in pre-market trading on Thursday, but investor enthusiasm was tempered by lingering concerns about the sustainability of the AI infrastructure boom. The company reported a fiscal fourth-quarter revenue of $68.13 billion, surpassing analyst expectations of $66.21 billion, as per data from LSEG. This marks a significant 73% increase compared to the previous year, and the guidance provided also exceeded forecasts. Richard Clode, a portfolio manager at Janus Henderson Investors, noted that the focus has shifted from immediate earnings to the long-term viability of capital expenditure in AI. He expressed concerns regarding the potential impact on cash flow and monetization, suggesting that investor sentiment is being clouded by worries about the market's quantum. In early February, major hyperscale companies experienced a market cap loss exceeding $1 trillion, although they have since managed to recover some of those losses. Meanwhile, semiconductor rival AMD saw its stock plummet by 17% following a guidance report that, while exceeding many analysts' expectations, fell short of the more optimistic predictions. Dan Hanbury, global strategic equity co-portfolio manager at Ninety One, commented on the current market sentiment, indicating that broad AI concerns are weighing heavily on investors. He highlighted the challenge Nvidia faces in maintaining its rapid growth, particularly as its primary clients, the hyperscalers, are beginning to exhaust their cash flows allocated for AI-related capital expenditures. Nvidia's data center segment, which is home to its industry-leading chips, played a crucial role in driving revenue, contributing 91% of total sales. The data center revenue for the quarter reached $62.3 billion, surpassing the anticipated $60.69 billion according to StreetAccount. Furthermore, Nvidia provided an optimistic outlook for the first quarter of the fiscal year, projecting revenue of $78 billion, plus or minus 2%, significantly higher than the analysts' forecast of $72.6 billion. Clode remarked that this guidance represents the fourth consecutive quarter of accelerating growth, defying concerns of a potential slowdown.