Nvidia’s revenue surges 262% on record AI chip demand

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Nvidia’s revenue surged 262 percent last quarter on the back of record sales of artificial intelligence chips, exceeding expectations, and its CEO said its meteoric rise will continue this year with the launch of a new line of chips. Will remain.

Jensen Huang told investors the company will see “a lot” of revenue from its new Blackwell chips this year, as it profits from growing demand for the computing power behind generative AI.

Huang said Blackwell will contribute to a new stage of the company’s growth, adding that Nvidia will continue to release new, more powerful chips at the same pace. “After Blackwell, there’s another chip, and we’re on a one-year rhythm,” he said.

Demand for Nvidia’s AI data center graphics processing units has skyrocketed in the past year as big tech companies race to develop the computing infrastructure needed to deliver powerful new AI products at scale. Google, Microsoft, Meta and Amazon have all indicated that their spending will remain high through 2024.

Revenue for the three months through the end of April was $26 billion, compared with a consensus estimate of $24.7 billion. The massive year-over-year increase was similar to the previous quarter, when growth reached 265 percent. For the current quarter, Nvidia expects revenue of about $28 billion, plus or minus 2 percent, compared with a consensus estimate of $26.8 billion.

Nvidia’s data center revenue, which is related to its coveted AI chips, grew 427 percent year over year to $22.6 billion during the quarter, driven by strong demand for Nvidia’s current-generation Hopper GPUs, Nvidia Chief Financial Officer Colette Kress told investors. Shipments of the Blackwell chip are expected to begin this quarter.

Nvidia shares, which are up more than 90 percent since the start of the year, were up about 6.7 percent in pre-market trading on Thursday. The chipmaker also announced a 10-for-1 stock split effective June 7 and said it was raising its quarterly cash dividend by 150 percent.

Before the results were announced, traders were expecting big moves in Nvidia shares and the markets at large. The stock’s massive rally has made it one of the most-watched names on Wall Street. Its market capitalization has increased more than sixfold to $2.3 trillion since the start of 2023, overtaking Google’s parent company Alphabet and Amazon to become the third most valuable US-listed company.

Nvidia is moving quickly to take advantage of the growing demand for AI and stay ahead of competitors and customers who are developing their own AI chips. It unveiled its Blackwell chips in March, which it says are twice as powerful as the current generation of chips for training AI models and deliver five times the performance at “inference” – the speed at which such models Can answer questions. This comes just a year after the company revealed its previous generation GPU chip architecture, Hopper.

Analysts had questioned whether the shift to a new product line could impact the massive year-over-year growth Nvidia has recorded in previous quarters, as a temporary “air pocket” in demand emerges. For example, the faster pace of its chip releases has prompted Amazon to alter plans to order chips based on the previous generation of Nvidia’s architecture and replace them with those from the Blackwell line.

But Huang reassured investors that demand for both the Hopper and Blackwell lines was “far ahead of supply”, a situation that will likely continue “well into next year”.

Diluted earnings per share were $5.98, up more than 600 percent from a year earlier. Gross margin was 78.4 percent, slightly better than the 77 percent analysts predicted, Net income was $14.9 billion, above expectations of $13.2 billion.

Rivals AMD and Intel are introducing AI data center chips to compete with Nvidia, as well as working with Nvidia’s customers to offer alternatives to its software platform CUDA, solidifying its dominance as a chip supplier.

In April, Intel and AMD announced disappointing first-quarter results and modest guidance, suggesting they were still not reaping the benefits of the demand surge. On Tuesday, Microsoft announced that it will use AMD’s new MI300X accelerator chips and its RoCM software to run some of the most demanding AI workloads on its Azure cloud service.

“Nvidia beats the data center [revenue] “The entire market was waiting for this number, and Nvidia delivered,” said Daniel Newman, chief executive of Futurum Group.

He said the stock split would create “greater access” as well as “additional momentum for the stock.” “AI trading is alive and well.”

Video: AI: A boon or curse for humanity? | FT Tech


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