NVIDIA continues to provide robust forecasts that reflect the pace of AI

NVIDIA, the chipmaker at the center of the AI ​​boom, released another upbeat sales forecast, showing that spending on AI computing remains strong.

The company said in a statement Wednesday that second-quarter revenue would reach about $28 billion, and that analysts on average expected it to reach $26.8 billion, beating expectations for the first fiscal quarter that runs through April, according to data compiled by Bloomberg.

What do the markets expect for Nvidia’s results in the first quarter?

“The next industrial revolution has begun, and AI will bring significant productivity gains to every industry and help companies become more cost- and energy-efficient, while expanding revenue opportunities,” CEO Jensen Huang reiterated one of his favorite themes.

Optimistic expectations reinforce Nvidia’s position as the biggest beneficiary of spending on artificial intelligence. The company’s so-called artificial intelligence accelerators — chips that help data centers build chatbots and other sophisticated tools — have become a hot commodity in the past two years, with sales soaring to $2.3 trillion.

Shares rose 4% in after-hours trading on Wednesday. It is important to note that the share price has already gained 92% in the current year to the close, driven by investors’ confidence that the company’s business results will continue to exceed expectations.

The Santa Clara, California-based company also announced a 10-for-1 stock split and raised its quarterly dividend by 150% to 10 cents.

Nvidia… the next wave of growth

“We’re ready for the next wave of growth,” Huang said.

NVIDIA, co-founded by Huang in 1993, began as a provider of graphics cards for PC gamers. He said the company’s chips are well-suited to developing artificial intelligence software, giving him an advantage over competitors and helping open up a new market.

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OpenAI’s release of ChatGPT in 2022 sparked a race among major tech companies to build their own AI infrastructure. The company sells a chip for tens of thousands of dollars, and its supply is often in short supply.

But most of this new revenue comes from a small group of four companies: Amazon, Meta, Microsoft, and Alphabet, and account for 40% of its sales.

Huang, 61, is trying to expand his bet by making complete computers, software and services, and aims to help more companies and government agencies deploy their artificial intelligence systems.

Nvidia’s revenue tripled

In the first fiscal quarter, Nvidia’s revenue more than tripled to $26 billion. Excluding certain items, earnings per share were $6.12. Analysts were expecting sales of about $24.7 billion and earnings of $5.65 per share.

Nvidia’s data center division, now its biggest source of sales ever, posted revenue of $22.6 billion, with gaming chips posting $2.6 billion, and analysts had set targets of $21 billion for the data center unit and $2.6 billion for gaming.

This content is from Economy East with Bloomberg

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