Nvidia, the AI chip maker that is the world's most valuable company and the driving force behind the artificial intelligence boom, delighted investors on Wednesday with new quarterly results.
The company's corporate value soared by $2.2 trillion this year to $3.6 trillion on the back of nearly doubling chip sales, but sales fell to $35.08 billion, compared to expectations of $33.15 billion. It was announced that it was worth $1,000,000. Profits more than doubled compared to the same period last year. Sales increased by 94% compared to the same period last year. The company predicted a 70% increase in revenue for the next quarter.
Analysts had expected NVIDIA to report earnings of $0.75 per share. The company reported $0.81. Nvidia stock fell about 5% in extended trading following the announcement, but quickly recovered its losses and maintained a similar price. The previous New York closing price was $145.89.
Nvidia CEO Jensen Huang said in a press release last week that he expects the computing power driving advances in generative AI to increase “a million times” over the next decade.
Huang said on the earnings call that the global adoption of Nvidia technology is causing a platform shift from coding to machine learning, and traditional data centers are being re-architected for machine learning to produce AI. said.
“Generative AI is not just a new software feature, it’s a new industry with AI factories producing digital intelligence, a new industrial revolution with the potential to create a multi-trillion dollar AI industry,” he said. .
“AI is transforming every industry, business, and country,” Huang added. “Creating an omniverse of synthetically generated data…the era of robotics is here.”
A surge in demand for Nvidia's Blackwell GPU chips appears to have eased fears that the company would be hit by a backlash in demand from tech giants, which are spending billions of dollars on AI processing and data centers. .
Nvidia stock has rebounded from its summer slump and is up 45% from its August lows. Semiconductor stocks are up nearly 200% this year, more than 1,100% over the past two years, and hit a record high after the election.
However, many of NVIDIA's chipmakers are struggling to compete with the advantages of AI, which is holding the industry back.
Before the results were released, Wedbush analyst Dan Ives said he expected more “drop-the-mic performance” from Nvidia, adding that “it's expected to generate more than $1 trillion in the next few years.” “This is the only game in the city where AI capital investment is planned.” Nvidia's GPUs will bring new oil and gold to this world. ”
The world's largest technology companies have increased their spending on AI by billions of dollars in recent quarters, with Nvidia positioned as a major beneficiary.
Nvidia is seen by many as a bellwether for the technology sector and artificial intelligence demand that helped propel Wall Street to multiple record highs this year.
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But the escalation of the Russia-Ukraine war, the threat of global tariff hikes by the incoming Donald Trump administration and the possibility that the US Federal Reserve will not lower US interest rates are also spooking markets.
Other analysts echoed Ives' assessment that demand for Nvidia's new Blackwell chips could push Nvidia's sales and market capitalization to new heights. Charu Chanana, Saxo's chief investment strategist, said signs of “extraordinary demand” for new chips, including record sales forecasts and reports of sold-out inventory next year, are strong indicators that Nvidia's strong performance will continue. I wrote that.
But Chanana cautioned that “any signs of production delays or lack of demand could put pressure on the stock given valuation growth.”
Earlier this week, report Chipmakers say their latest graphics chips are having overheating problems with servers. www.theguardian.com
