The author of best-selling book Chip War explains why efforts to rely less on companies like Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC) won’t work.
Nvidia revenues soared 265 per cent in the latest quarter to $22.1b (NZ$35.75b) as the world’s most valuable chip company benefited from a spending frenzy on artificial intelligence.
The revenue performance beat analysts’ already heightened expectations of $20.4b, boosted by a409 per cent rise in data centre revenue to $18.4b compared to the previous year.
“Accelerated computing and generative AI have hit the tipping point,” said Nvidia founder and chief executive Jensen Huang.
“Demand is surging worldwide across companies, industries and nations.”
Shares in the California-based company, which has grown to a market valuation of $1.8 trullion and overtaken Google-parent Alphabet as the third most valuable listed company, traded up 6.5 per cent at $718.71 after hours.
Its shares had already gained 50 per cent so far this year before it reported its financial results for the fourth quarter on Wednesday, US time.
AWS CEO Adam Selipsky and nVidia founder Jensen Huang announce an expanded partnership at AWS re:Invent 2023.
Nvidia said earnings per share had reached $4.93, beating analysts’ expectations of $4.59, according to LSEG estimates.
Net income rose 770 per cent to $12.3b compared to the same period in the previous year, which also exceeded analyst expectations of $10.4b.
Nvidia has become a proxy for AI demand as big tech companies such as Alphabet, Microsoft, Amazon and Meta have all increased their investment in AI computing. Its leading chips, such as the H100, are used by AI developers to create large language models.
OpenAI’s ChatGPT turned the $40,000 Nvidia chips into the hottest commodity in Silicon Valley last year. Meta plans to bring its total stock of H100 chips to 350,000 this year, chief executive Mark Zuckerberg said in January.
“Our data centre platform is powered by increasingly diverse drivers,” Huang said, as industries including automotive, financial services and healthcare were now spending “at a multibillion-dollar level”.
Investors are paying close attention to whether Huang can maintain Nvidia’s stratospheric growth rates as its focus shifts to new products, such as its top-end AI chip, the B100, which is expected to start shipping later this year.
Nvidia said on Wednesday that it expected revenues to rise again — to $24b — in the current quarter.
Ahead of the latest earnings, analysts at Bank of America said Nvidia’s soaring share price was due to “a mix of fear and greed and indiscriminate investor chase for all things AI”.
