Shares of Nvidia jumped 26% in after-hours trading on Wednesday after the company disclosed first-quarter earnings for its fiscal 2024.
Here's how the firm fared in comparison to predictions made by financial analysts as of April 30th, as provided by Refinitiv:
Adjusted earnings per share of $1.09, compared to analysts' forecasts of $92.00
Compared to the predicted $6.52 billion, sales were $7.19 billion.
More than 50% higher than Wall Street projections of $7.15 billion, Nvidia forecast sales of around $11 billion, plus or minus 2%, for the current quarter.
Nvidia's stock had already risen 109% in 2023 prior to the after-hours trading, largely due to investor enthusiasm over the company's dominant position in the market for AI chips. CEO Jensen Huang of Nvidia recently stated that the business was experiencing "surging demand" for its products targeted at data centres.
The data centre division of Nvidia reported $4.28 billion in revenue, above analyst projections of $3.9 billion by 14%. Cloud providers and major consumer internet firms utilise Nvidia chips to train and deploy generative AI applications like OpenAI's ChatGPT, according to Nvidia, which explains the increase in performance.
Nvidia's success in the data centre demonstrates the growing importance of artificial intelligence chips for cloud providers and other businesses with a large server infrastructure.
In contrast, Nvidia's gaming sector, which includes the company's graphics card sales for PCs, reported a 38% reduction in revenue to $2.24 billion, down from $1.98 billion expected. The slowdown in the global economy and the increased production of Nvidia's newest graphics processing units for video games were cited as the reasons for the fall.
The automotive segment of Nvidia, which produces processors and software for developing autonomous vehicles, had annual growth of 114%, but still generated less than $300 million in revenue.
The company's quarterly net income increased to $2.04 billion, or 82 cents per share, from $1.62 billion, or 64 cents per share, in the same time a year ago. Sales for Nvidia were down 13% from last year's record high of $8.29 billion.
The stock price surge pushed the market capitalization of the firm to over $950 billion, an increase of close to $200 billion. This solidified the company's position as the most valuable chipmaker in the world and the fifth most valuable company on Wall Street.
Nvidia predicted $11 billion in sales for the quarter ending in July. This was in contrast to the average forecast of $7.18 billion made by analysts. ChatGPT and other similar services are powered by the company's artificial-intelligence chips, and the demand for these chips continues to rise.
Nvidia issued a revenue estimate significantly ahead of Wall Street expectations, which caused its stock price to spike in after-market trading as demand for its chips increased to train the newest generation of generative AI systems like ChatGPT.
Its position as the biggest short-term beneficiary of the AI race that has broken out in the technology industry was confirmed on Wednesday when the US chipmaker said it expected sales to reach $11bn in the three months to the end of July, more than 50 percent ahead of the $7.2bn analysts had been expecting.
Nvidia's stock price jumped 27% after the estimate, bringing its market cap to a record $960bn. The company's shares had already more than doubled since the beginning of the year.
The company's CEO, Jensen Huang, recently announced that the firm was "significantly increasing our supply to meet surging demand" for all of its data centre chips, including the H100, a product released this year that is optimised for the needs of so-called large language models like OpenAI's GPT-4.
Some buyers have privately voiced concern about a potential shortage of H100 chips, which only recently went on sale, as a result of the tech industry's rush to construct larger AI models. Nvidia's latest quarterly revenue of $4.28 billion from data centre customers exceeded even the most bullish estimates, as the company reported robust demand for both the H100 and A100 chips, which are based on Nvidia's prior chip architecture.
Although it is too soon for the company to offer longer-term financial forecasts, CFO Colette Kress indicated a further rise in demand that would persist well beyond the current quarter. Nvidia was able to plan "substantially higher supply for the second half of the [fiscal] year" because to "extended out a few quarters" of demand visibility, she said.