NVIDIA reported revenue for the first quarter of a new fiscal year and provided guidance for the current quarter. The forecast is extremely optimistic, beating Wall Street pundits’ expectations by more than 50%. The company said it is ramping up shipments to meet growing demand for AI chips that power technologies like ChatGPT and other similar services.
On the back of this news, NVIDIA shares are up 28% even before the start of trading, to a record high of $391.50 each time. This immediately boosted NVIDIA’s stock market capitalization by $200 billion to over $950 billion — the company remains the most valuable chipmaker on the stock market and the fifth most valuable company overall, according to Wall Street estimates.
NVIDIA is struggling to keep up with demand for AI chips. It is known that the head of Tesla, Elon Musk, said in a recent interview with sarcasm that the GPU today “much harder to get than drugs”. However, NVIDIA CEO Jensen Huang said yesterday that the company started mass production of the latest AI chips as early as August last year, giving it some buffer of supply as chatbots became more popular. Demand was extremely strong in January, prompting additional chip production orders to be placed, significantly more than planned for the second half of 2023, Huang said.
NVIDIA forecasts record revenue of $11 billion for the current quarter, the error is about 2%. At the same time, analysts polled by Renfinitiv assumed it would be about $7.15 billion. Now, the “gold rush” in the AI systems market is expected to fuel demand later in the year.
Adjusted revenue for the first fiscal quarter ended April 30 at NVIDIA was $7.19 billion, down 13% year over year, although analysts called it a decline to $6.52 billion had forecast. %, reaching $4.28 billion (vs. $3.89 billion according to analyst forecasts). ). However, revenue from gaming chip sales immediately fell 38 percent year-over-year, while also beating expert forecasts, totaling $2.24 billion vs. $1.97 billion predicted. NVIDIA’s automotive division, which includes chips and software for self-driving cars, grew 114% year over year but still accounts for a modest share of revenue — down from less than $300 million last quarter.
NVIDIA’s net income increased to $2.04 billion, or 82 cents a share, last quarter, compared to $1.62 billion, or 64 cents, a year ago. Excluding certain items, the company earned $1.09 per share in the first quarter, up 92 cents from guidance.
NVIDIA must compete aggressively in the AI chip market with companies like AMD and Intel, as well as startups like Cerebras Systems, and even tech giants like Alphabet and Amazon that can’t develop projects of their own. At the same time, NVIDIA management made it clear that it is committed to selling ready-made AI systems instead of trading chips – the company says it has all the options, including the capacity, to develop software for cloud solutions. In February, the company reported on the entire past financial year.