AI Demands Boost Nvidia's Revenue
US tech company's shares soar after announcing $11bn sales projection for this quarter.
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Nvidia is experiencing high demand for chips to train new generative artificial intelligence systems. This includes ChatGPT. As a result, they gave a revenue forecast that exceeded Wall Street's predictions. After the announcement, Nvidia's stock price saw an increase during after-market trading.
On Wednesday, the US chipmaker predicted that they will make $11bn in sales by the end of July. This is more than 50% of what experts anticipated. This confirms their position as the top beneficiary of the technology industry's AI race.
Nvidia's shares went up 27%. This happened after the forecast was released. The forecast caused its share value to exceed $960 billion. Nvidia's shares have doubled since the start of the year.
Jensen Huang said Nvidia is increasing supply to meet high demand for data centre chips. The H100 chip, designed for large language models like OpenAI's GPT-4, is included in this family of chips. The H100 chip was launched this year.
Customers in the tech industry are worried about a shortage of H100 chips because companies want bigger AI models. Nvidia made $4.28bn in sales to data centre customers in their latest quarter, which was more than what people expected. The company says that both the H100 and A100 chips have been selling well based on their previous chip architecture.
Colette Kress said that there will be more demand for Nvidia's products in the future. She didn't give financial guidance for the long-term. Nvidia has bought more supplies for the second half of the fiscal year. The company knows about demand for the next few quarters.
Nvidia thinks it might sell twice as much to data centres in three months. This is even though they sold $17bn worth in the first quarter of the year. The growth comes from all kinds of customers, including big internet companies, cloud computing people and enterprise customers. They all want to use the AI to help their businesses.
Nvidia's latest revenue and earnings were better than expected. They sold more AI chips for data centres. Gaming chip sales went down. Nvidia is predicting good things for the future.
The company's earnings per share went up 22% compared to the previous year. On Wall Street, they were judged to be worth 82 cents and $1.09 on a pro forma basis. Beforehand, Wall Street had expected revenue to be $6.52bn and earnings to be 92 cents per share.
