AI giant NVIDIA surpasses estimates with 600% profit surge
US tech giant NVIDIA has reported a significant surge in its quarterly results, that have exceeded all estimates. The firm's shares have surpassed the $1,000 mark for the first time in extended trading. Alongside this achievement, the firm announced a 10-for-1 stock split, and a 150% increase to its quarterly dividend which will now be 10 cents.
Revenue and earnings per share exceed expectations
NVIDIA reported a revenue of $26.04 billion for the quarter, surpassing the estimated $24.65 billion. The company's Earnings per Share (EPS) also exceeded expectations, coming in at $6.12 against the estimated $5.59. Furthermore, NVIDIA's guidance for the current quarter is projected to be $28 billion, a 100% increase from the same period last year, and higher than analysts' projection of $26.8 billion.
AI demand boosts NVIDIA's business significantly
The robust demand for AI has significantly boosted NVIDIA's business, with tech giants like Google, Microsoft, Amazon, Meta, and OpenAI purchasing NVIDIA's Graphic Processing Units (GPUs) in billions. As a result, the firm's core data center business saw its revenue grow by over five times during the quarter to over $22 billion. CFO Colette Kress attributed this rise to higher shipments of its Hopper graphic processor, which includes the H100 GPU.
NVIDIA reports increase in gaming, visualization, and automotive sales
NVIDIA reported an 18% increase in gaming revenue during the quarter to $2.65 billion, due to strong demand. Professional visualization sales climbed to $427 million while automotive sales were at $329 million, during the quarter. Large cloud providers make up more than 40% of NVIDIA's data center revenue, contributing significantly to the company's overall financial performance.
CEO foresees AI as the next 'industrial revolution'
CEO Jensen Huang stated that AI will usher in significant productivity gains to almost every industry, and expand revenue opportunities as the next "industrial revolution" begins. He wants to move beyond cloud service providers to "sovereign AI," or nations developing their own AI systems, which he believes are "creating multiple multibillion-dollar vertical markets." This strategic shift could potentially open up new avenues for NVIDIA's growth in the future.
