Nvidia, the key player in the chips that power artificial intelligence, released quarterly results on Wednesday confirming that it has become one of the biggest winners of the artificial intelligence boom, with continued sales growth driven by demand for its products. He said he would promote the
The Silicon Valley chipmaker has experienced extraordinary growth over the past 18 months, driven by demand for specialized and expensive semiconductors used to train popular AI services such as OpenAI’s ChatGPT chatbot. Nvidia has become known as one of the “Magnificent Seven” tech stocks, along with Amazon, Apple, and Microsoft, and has contributed to the growth of the stock market.
Nvidia’s valuation has risen more than 40% since the start of the year to $1.7 trillion, making it one of the world’s most valuable publicly traded companies. Last week, the company briefly overtook Amazon and Alphabet in market capitalization, before falling to the fifth-largest tech company by market capitalization. The company’s stock market rally has largely been the result of repeatedly beating analysts’ growth expectations, a feat that has become increasingly difficult as analysts continue to raise their expectations.
On Wednesday, NVIDIA reported that its fiscal fourth quarter revenue more than tripled year-over-year to $22.1 billion, while profit rose nearly nine times to $12.3 billion. Revenues were well above the $20 billion the company expected in November and also exceeded Wall Street expectations of $20.4 billion.
Nvidia expected revenue for the quarter to total about $24 billion, also more than triple the year-ago period and higher than analysts’ average estimate of $22 billion.
Nvidia co-founder and CEO Jensen Huang insists the monumental shift to upgrade data centers with chips needed to train powerful AI models is still in its early stages. do. To do that, he predicts, he would need to spend about $2 trillion to enable every building and computer to use chips like Nvidia’s.
“High-speed computing and generative AI have reached a tipping point,” Huang said in a news release. “Demand is surging around the world, across companies, industries and nations.”
Some analysts expected the stock price to fall in response to the soaring price after Nvidia’s announcement. But in after-hours trading, the stock rose more than 9%.
“Despite concerns about high valuations, NVIDIA’s unparalleled AI intellectual property, rooted in decades of visionary investing, is That sets the company apart,” said Rosenblatt Securities analyst Hans Mosesmann. The company reported.
One of the factors driving Nvidia’s recent revenue growth is that the company’s production partners, led by Taiwan Semiconductor Manufacturing Company, are increasing their supply of Nvidia’s flagship AI chips, which range in price from $15,000 to $40,000. It is increasing.
In a conference call with analysts on Wednesday, Hwang said the availability of these chips has improved significantly, but noted that the company will soon introduce new products that will be in short supply again.
“Every time a new product comes out, that number goes from zero to a very large number, and that doesn’t happen overnight,” he said during the call.
But cloud computing giants like Amazon, Google, and Microsoft are designing their own AI chips in addition to Nvidia’s, and rival chipmakers continue to introduce their own AI products.
Intel, which has long dominated the standard microprocessor chip industry but has lagged in AI, on Wednesday brought together a slew of partners and potential customers in Silicon Valley to offer manufacturing services that could boost the industry’s ability to make AI chips. We discussed plans to offer. Attendees included Sam Altman, who relies heavily on his Nvidia chips as CEO of OpenAI.
“Intel used to be the evil Borg of the industry,” said Daniel Newman, CEO of Futurum Research, which tracks the semiconductor industry. Now, “companies are coming together to make sure NVIDIA doesn’t get too powerful,” he said.
The Biden administration has raised new hurdles for Nvidia and other U.S. chipmakers, including placing limits on chip sales in China. Nvidia responded by selling less powerful versions of some of its products to the market.
Still, the company said Wednesday that sales to China as a percentage of its data center chip sales fell to mid-single digits from 19% in fiscal 2023.
Some experts, however, worry that deploying the company’s expensive, power-hungry chips globally could put too much strain on national power grids and budgets.
Huang addressed some of these concerns at the World Government Summit in Dubai in February. He said Nvidia’s chips are cheaper and more efficient than using slower standard microprocessors to do the same work. He also said faster chips are in development, some of which the company plans to announce in March.
“Assuming computers don’t get any faster, we might conclude that we need 14 different planets, three different galaxies, and four more suns to propel all of this. ” said Huang. “But clearly computer architecture continues to advance.”
