Chipmaker Nvidia Corp. continues to gain in late trading, as its sales forecast in AI computing is still strong, accompanied by its bullish spending.
Thus, proving, that the hype of the AI intelligence boom is still alive and kicking. The results of April 28 in the fiscal first quarter, beat projections, courtesy of the growth in Nvidia’s data-center division.
Earlier on Wednesday, the company also announced, that the revenue of second quarter will touch $28 billion, which is more than the prediction made by analysts.
But the bigger question is, do Nvidia’s latest number justify their dizzying run-up in its stock or not.
As the shares had managed to gain 92 percent this year through Wednesday’s close. Which made investors hope, that Nvidia will continue defy expectations.
However, the report didn’t disappoint. As a result, Chief Executive Officer Jensen Huang became so upbeat, that it started talking about the dawn of new era.
“This is the beginning of a new industrial revolution,” he said in an interview, echoing one of his favorite themes. “This is really exciting.”
This positive outlook reinforces the fact, that Nvidia continues to reap a lot from AI spending.
As companies’ so-called AI accelerators (chips that help in the development of chatbots and other cutting-edge tools) are now selling like hot cake in the past two years.
Thus, leading to soaring of sales. Which lead to the increase in Nvidia’s market valuation, which now sits at $2.3 trillion.
In the fiscal first quarter, the chip company’s revenue has now tripled to $26 billion. If profit is to be taken into account, excluding certain items, the profit was $6.12 a share.
As a result, Jensen Huang has now become big in the AI market, after he recognized, that his chips are well-suited for development of AI software. Thus, opening a new market and giving him a lead ahead of competitors.
The recent unveiling of OpenAI’s ChatGPT chatbot in 2022, has immensely benefited the company. As, it sparked competition among major tech companies, to develop their own AI infrastructure.
Taking advantage of this race, Nvidia’s H100 accelerators became a lot more popular, as they are sold in tens of dollars per chip and are often in small supply.
So far, the company’s revenue is largely fueled by the group of four companies- Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and Alphabet Inc.’s Google. These companies together account for 40% of their sales.
Later, when the company was asked about their plans, 61-year-old huang has recently announced, that it is planning to sell its technology to a wider market.
Which technically involves, expansion beyond giant cloud-computing providers called hyperscalers.
In addition, the company also plan to produce complete computers, software and services. Which will help more corporations and government agencies to use or deploy their own AI systems.
But the company for now is dealing with other challenges like increasing complexity of technology. Meaning, that supply chains have now become more complicated. Thus, making it tough to increase their output.
Talking about this in an interview, Jensen said “Nobody has ever manufactured supercomputers at volume…We’re doing the best we can.”
