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Thanks to record sales of artificial intelligence chips, Nvidia's sales rose 262 percent last quarter, exceeding all high expectations. The company's chief executive said the corporate's rapid growth will proceed this yr with the launch of a brand new range of chips.
Jensen Huang told investors that the corporate will generate “loads” of revenue this yr from its latest Blackwell chips because it capitalizes on exploding demand for the computing power behind generative AI.
Blackwell will help usher in a brand new phase of growth for the corporate, Huang said, adding that Nvidia will proceed to bring out newer, more powerful chips at the identical pace. “After Blackwell comes one other chip, and we're on a one-year cadence,” he said.
Demand for Nvidia's graphics processors for AI data centers has skyrocketed over the past yr as the most important technology corporations rush to develop the computing infrastructure needed to deliver powerful latest AI products at scale. Google, Microsoft, Meta and Amazon have all indicated that their spending will remain high in 2024.
Sales for the three months ended April were $26 billion, in comparison with consensus estimates of $24.7 billion. The huge year-on-year increase was just like the previous quarter, when growth was 265 percent. For the present quarter, Nvidia expects revenue of about $28 billion, up or down 2 percent, in comparison with consensus estimates of $26.8 billion.
Nvidia's data center revenue, which is expounded to the coveted AI chips, rose 427 percent year-over-year to $22.6 billion within the quarter, driven by strong demand for Nvidia's current-generation Hopper GPUs, Nvidia CFO Colette Kress told investors. Shipments of the Blackwell chip are expected to start this quarter.
Nvidia shares, which have prolonged their rapid year-to-date rise by greater than 90 percent, rose about 6.7 percent in premarket trading on Thursday. The chipmaker also announced a 10-for-1 stock split effective June 7 and said it could increase its quarterly money dividend by 150 percent.
Ahead of the earnings announcement, traders were bracing for large swings in Nvidia shares and markets typically. The stock's massive rise has made it one of the vital watched names on Wall Street. Since the beginning of 2023, its market capitalization has increased greater than six-fold and now stands at $2.3 trillion, overtaking Google parent Alphabet and Amazon to grow to be the third most precious publicly traded U.S. company.
Nvidia has hurried to capitalize on the increasing demand for AI and stay ahead of its competitors and customers developing their very own AI chips. In March, the corporate introduced its Blackwell chips, that are said to be twice as powerful as the present generation of chips for training AI models and in “inference” – the speed at which such models can reply to queries Offer five times higher performance. This got here only a yr after the corporate unveiled its previous generation of GPU chip architecture, Hopper.
Analysts had questioned whether the transition to a brand new product line could dent the huge annual growth Nvidia has posted in recent quarters by creating a brief “air pocket” in demand. The rapid pace of chip releases, for instance, has led Amazon to alter its plans and order chips based on the last generation of Nvidia's architecture and replace them with the Blackwell series.
But Huang assured investors that demand for each the Hopper and Blackwell lines is “far outpacing supply,” a situation that can likely persist “well into next yr.”
Diluted earnings per share were $5.98, up greater than 600 percent yr over yr. The gross margin was 78.4 percent, barely above the 77 percent predicted by analysts. Net income got here in at $14.9 billion, beating expectations of $13.2 billion.
Rivals AMD and Intel have launched data center AI chips to compete with Nvidia's and partnered with Nvidia's customers to supply alternatives to its Cuda software platform, cementing its dominance as a chip supplier.
In April, Intel and AMD reported lackluster first-quarter results and modest guidance, suggesting they’re yet to learn from explosive demand. On Tuesday, Microsoft announced that it could use AMD's latest MI300X accelerator chips and ROCm software to run a few of the most demanding AI workloads on its Azure cloud service.
“Nvidia exceeded expectations in data center revenue across the board,” said Daniel Newman, CEO of Futurum Group. “The entire market was waiting for this number and Nvidia delivered.”
The stock split will create “more accessibility” in addition to “additional momentum for the stock,” he added. “AI trading is alive and well.”
