Nvidia declares AI ‘tipping point’ as quarterly revenues jump 265%
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Nvidia, the top-rated chip company, experienced a remarkable 265% surge in their total revenue for the latest quarter which amounted to $22.1bn. This impressive growth can be attributed to the increasing demand for artificial intelligence products and services.
The profits earned exceeded the predictions of financial experts who expected $20.4 billion. This was due to a staggering increase of 409% in the revenue generated by data centres, which amounted to $18.4 billion in comparison to the previous year.
According to Jensen Huang, the founder and CEO of Nvidia, the use of fast computing and creative artificial intelligence has now reached an important moment. This technology is in high demand globally, from various businesses, industries, and nations.
The business in California has expanded significantly and is now valued at $1.8tn. This has caused them to surpass Alphabet, the parent company of Google, and become the third most valuable listed company. After the market closed, their shares rose by 6.5 per cent and were trading at $718.71.
Before announcing its financial results for Q4 on Wednesday, the company's stocks had already surged by 50% this year.
Nvidia reported that their earnings per share rose to $4.93, which was better than what analysts predicted, according to estimates from LSEG.
There was a significant increase in net income by 770% to $12.3 billion compared to last year. This surpassed what analysts predicted, as they had estimated it to be $10.4 billion.
Big tech firms like Alphabet, Amazon, Meta, and Microsoft are investing more in AI computing and this has made Nvidia a go-to for AI demand. Their top chips, like the H100, are being utilized by AI creators to build massive language models.
Last year, the ChatGPT technology from OpenAI created a high demand for the $40,000 Nvidia chips in the technology hub of Silicon Valley. Meta, led by CEO Mark Zuckerberg, announced plans to increase their supply of H100 chips to a total of 350,000 throughout this year.
"The drivers that fuel our data center platform are becoming more varied," remarked Huang. He added that industries such as automotive, financial services, and healthcare were now investing in the technology at a level of billions of dollars.
The growth rates of Nvidia are sky-high and investors are watching closely to see if Huang can keep it up. They want to see how Nvidia will do with its new products, like the powerful B100 AI chip. It's set to be released later this year.
Yesterday, Nvidia declared its projection for a revenue increase in the ongoing quarter and forecasted it to reach up to $24 billion.
Prior to the upcoming earnings report, experts from Bank of America claimed that Nvidia's rapidly increasing stock value was a result of "a combination of anxiety and eagerness, along with a general frenzy among investors for anything related to artificial intelligence."
