Nvidia makes microchips, but it signs up big time. The income of the company run by Jensen Huang skyrocketed 262% in the last quarter, when it exceeded all Wall Street expectations by reporting sales that tripled its previous record and noted that the boom in artificial intelligence (AI) has placed to the microchip manufacturer above two billion dollars in valuation and an even stronger projection.
“The next industrial revolution has begun,” Huang stressed upon learning of these results. “AI will bring significant gains to virtually every industry and help companies become more cost and energy efficient while expanding revenue opportunities,” he added in his statement.
His euphoria is understandable. Nvidia’s status is the main beneficiary of the expansion of artificial intelligence. The shares of this firm exceeded $1,000 per title for the first time after the market closed, with increases that have reached 7%.
Revenue increased to 26 billion in that quarter (above the 24.7 billion expected by experts), a record amount, the company reported. The net profit was 14,880 million, multiplying by seven the 2,000 million from a year ago. And the internal projection establishes that income will reach 28,000 million at the end of the current quarter.
These figures are well above analysts’ previous estimates, although comparisons with other quarters are complex due to the increasing expansion of AI. The company’s so-called artificial intelligence accelerators, chips that help data centers develop chatbots and other cutting-edge tools, have become a hot item in the past two years and their sales have skyrocketed.
The shares of the microchip manufacturer, based in Santa Clara, California, have more than tripled in the last twelve months and the company announced this Wednesday that it will split its shares 10 for 1, a decision effective as of June 7. It will also increase its dividends from four to ten cents per share.
OpenAI turned to Nvidia for its ChatGPT chatbot, which surprised users with its ability to generate texts similar to those of humans.
There are very few alternatives to its microchips and other companies such as Google, Microsoft, Meta and Amazon purchased billions of dollars worth of Nvidia’s graphics processing units, which are the advanced and expensive chips required to develop and deploy artificial intelligence applications.
Although the company has tripled or more its business, Huang ventured that the next generation of GPU-AI servers, artificial intelligence task accelerators called Blackwell, will bring much more growth. Some analysts argued that Nvida defies gravity.
Before gaining fame as a major supplier to companies building AI, Nvidia was known as the company that made hardware for 3D games. Income from this concept rose 18% during the last quarter and stood at 2,650 million, which the firm attributes to a very strong demand.