Unlock Editor's Digest totally free
Roula Khalaf, editor of the FT, picks her favorite stories on this weekly newsletter.
Nvidia said its latest generation of chips is in “great shape” because the world's most dear company reported one other strong quarter of revenue growth due to high demand for the infrastructure that has supported the synthetic intelligence boom.
Sales within the quarter ended October nearly doubled in comparison with the previous 12 months and rose 94 percent to $35.1 billion, it said in an announcement Wednesday. The pace of growth slowed in comparison with the previous quarter, but at $33.25 billion was still well above analysts' expectations.
Nvidia's current-quarter revenue forecast of $37.5 billion, give or take 2 percent, matched consensus expectations of $37 billion. Still, Wall Street's expectations for Nvidia – whose growth has skyrocketed on intense AI hype – are high, and shares fell about 1.1 percent in premarket trading on Thursday.
Analysts have been keeping a detailed eye on how Nvidia's recent generation of chips called Blackwell, which debuted earlier this 12 months, might affect near-term sales growth and whether the chip faces technical problems when deployed at scale.
According to a recent report from The Information, the Blackwell chips were experiencing issues with servers overheating. The chip already had production problems in the beginning of the 12 months.
Asked in regards to the report, Nvidia CEO Jensen Huang said Nvidia sold more Blackwell products than expected this quarter, exceeding its previous forecast of “several billion” dollars in sales for the fiscal 12 months.
“We might be shipping more Blackwells this quarter than we previously estimated, and so the availability chain team, working with our delivery partners, is doing incredible work to grow Blackwell,” he said. “Blackwell is in great shape.”
Constraints in Nvidia's supply chain, including at its key manufacturing partner TSMC, have led analysts to query how quickly the brand new chips could be brought online to data centers.
Chief Financial Officer Colette Kress said Blackwell's customers – which include so-called hyperscalers resembling Microsoft, Google and Meta – are “in a race” to be first to market.
Data center revenue, which incorporates Nvidia's Hopper chips that powered the primary wave of the AI market boom, rose 112 percent 12 months over 12 months to $30.8 billion. Big tech corporations have poured billions of dollars into data center infrastructure that may train and run the models, and the spending spree is anticipated to grow through 2025.
Nvidia shares have risen greater than 200 percent because the start of the 12 months because the race to develop and adopt AI fueled the corporate's rapid growth. With a market value of $3.6 trillion, it’s the most dear publicly traded company on the planet and now has an outsized influence on the stock market. At the beginning of the 12 months, Nvidia contributed a couple of quarter of the S&P 500's gains.
Investors have viewed Nvidia's earnings as a measure of the health of the general tech market, with all of the most important tech corporations making significant investments in AI.
Gross margins were 75 percent, in step with consensus estimates. Adjusted net income was $20 billion, while earnings per share were $0.78, beating analysts' expectations.
Citi analysts said the outcomes were higher than expected as demand for Blackwell is anticipated to exceed supply well into fiscal 2026.
