What You Need to Know Ahead of Nvidia's Earnings Report Wednesday

(UPDATE—Feb. 21, 2024: This article has been updated with revised projections from analysts, who have raised their estimates over the past week.)

Nvidia (NVDA) is set to announce its fourth-quarter earnings for the 2024 fiscal year after the bell on Wednesday, with analysts expecting significant profit and revenue gains from the chipmaker as it benefits from the artificial intelligence (AI) boom.

Analysts anticipate Nvidia's revenue could reach $20.80 billion for the final quarter of fiscal 2024, more than triple the chipmaker's revenue in the same period a year ago, according to estimates compiled by Visible Alpha. 

Net income is expected to be $10.58 billion, up from $1.41 billion in the fiscal fourth quarter of 2023, while earnings per share (EPS) are projected at $4.25, compared to 57 cents in the same period a year earlier.

Key Metric: Data Center Business

In November, Nvidia's third-quarter earnings surged past estimates, lifted by growth in the chipmaker's data center business, which offers cloud and AI services. The data center segment reached a record high of $14.51 billion in revenue in the third quarter.

The data center could account for $17.33 billion in revenue for the fourth quarter, according to estimates compiled by Visible Alpha. That would be nearly five times the amount Nvidia reported in the same period the year prior.

Business Spotlight: Reports of New Custom Chip Unit Plans

Nvidia shares recently climbed to a record high following reports the chipmaker is planning to launch a new business unit focused on custom chips.

On the earnings call, the chipmaker could provide further details about the new business unit, which could help Nvidia capture a piece of the growing custom chip market and reinforce its position as the world's most valuable chip company amid the AI boom.

Several other chip firms, including Arm Holdings (ARM), Micron Technology (MU), Advanced Micro Devices (AMD), and Intel (INTC), reported results that beat estimates driven by AI demand.

Nvidia, whose shares have more than tripled in value over the past year, is expected to be one of the leading contributors to S&P 500 earnings growth in the first quarter of 2024, according to FactSet projections.