Nvidia’s Revenue Triples as AI Chip Boom Continues

(CTN News) – Following Nvidia’s fiscal third-quarter earnings, which were above Wall Street’s expectations, the chipmaker’s stock fell 1% in Tuesday’s extended trading. The business, however, predicted a poor quarter due to export limitations cutting into sales to Chinese and other international groups.

In a letter to shareholders, Colette Kress, Nvidia’s chief financial officer, stated, “We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions.”

In an interview with analysts, Kress revealed that Nvidia is assisting clients in China and the Middle East in securing government licenses to sell high-performance devices in the United States.

Kress expressed her doubt that Nvidia’s new data center products would make a significant impact in the fiscal fourth quarter, despite the company’s efforts to produce them per government laws and without license requirements.

In comparison to the general opinion of the analysts polled by LSEG (formerly Refinitiv), the following is the company’s performance:

The adjusted profit per share was $4.02, while the predicted profit was $3.37.

• Earnings: $4.02 per share, adjusted, vs. $3.37 per share expected
• Revenue: $18.12 billion, vs. $16.18 billion expected

A statement from Nvidia stated that their revenue for the quarter ended October 29th increased 206% year over year. Compared to the same quarter a year ago, net income increased to $9.24 billion, or $3.71 per share, from $680 million, or 27 cents per share.

The company’s data center sales surpassed the StreetAccount estimate of $12.97 billion, reaching $14.51 billion, an increase of 279%. Cloud infrastructure companies like Amazon accounted for 50% of data center revenue.

Nvidia stated that one came from consumer internet firms and the other from large companies.

During the call, Kress mentioned that clouds focusing on GPU rentals to clients saw a healthy demand.

Contributions from the gaming division were above the $2.68 billion estimate on StreetAccount and increased by 81%, totaling $2.86 billion.

For the fiscal fourth quarter, Nvidia predicted $20 billion in sales. This increased by around 231% in revenue.

Nvidia introduced the GH200 GPU during the quarter; it outshines the existing H100 in terms of memory and features an extra Arm CPU. Both the price and demand for the H100 are high.

According to Nvidia, the Australian company Iris Energy, which owns data centers that mine Bitcoin, reportedly paid $10 million (or around $40,000 per unit) for 248 H100s.

Instances of computing based on GH GPUs will soon be available on Oracle’s on the call, Kress stated.

Sales of graphics processing units (GPUs) used in personal computers were Nvidia’s bread and butter just over two years ago. Deployments inside server farms now generate the majority of income for the organization.

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-supported venture After OpenAI released its generative AI capabilities in 2022, several firms sought ways to incorporate them into their own applications. Consequently, there was a surge in demand for Nvidia’s GPUs.

Competition from AMD is one of the challenges that Nvidia must overcome.

Export limits may reduce sales of its graphics processing units (GPUs) in China, decreasing income. However, a few optimistic experts waited for Tuesday’s results.

In a note Monday to clients, Srini Pajjuri and Jacob Silverman of Raymond James emphasized that “GPU demand continues to outpace supply as Gen AI adoption broadens across industry verticals.”

They also recommended Nvidia stock with a “strong buy” endorsement. We anticipate that NVDA will continue to hold a market share of over 85% in Gen AI accelerators far into 2024. Thus, competition is not a major worry for us.

According to Kress, Nvidia is currently in the process of developing a strategy to increase supply over the course of next year.

In comparison to the S&P 500 index, which has up 18% so far this year, Nvidia stock has soared 241%, excluding the after-hours move.