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Nvidia’s Revenue Triples As AI Chip Boom Continues


Tuesday’s extended trading saw a 1% decline in Nvidia shares following the chipmaker’s release of fiscal third-quarter results that exceeded Wall Street forecasts. However, the company warned that export restrictions would have a negative effect on sales to organizations in China and other nations in the upcoming quarter.

“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,” Nvidia’s finance chief, Colette Kress, said in a letter to shareholders.

During a conference call with analysts, Kress stated that Nvidia is collaborating with certain clients in China and the Middle East to secure licenses from the US government to sell high-performance products. Nvidia is working on new data center products that are license-free and compliant with government regulations, but Kress stated she didn’t think any of them would be significant by the end of the fiscal year.

In comparison to the consensus of analysts polled by LSEG, formerly Refinitiv, the company performed as follows:

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

According to a statement, Nvidia’s revenue for the quarter that ended on October 29 increased by 206% year over year. In comparison to the same quarter last year, when net income was $680 million, or 27 cents per share, it increased to $9.24 billion, or $3.71 per share.

Revenue from the company’s data centers came to $14.51 billion, exceeding the $12.97 billion StreetAccount consensus and up 279%. According to Nvidia, cloud infrastructure providers like Amazon accounted for half of the data center’s revenue, with the remaining half coming from big businesses and consumer internet users.

According to Kress during the call, clouds that specialize in renting out GPUs to clients saw a healthy uptake.

The gaming industry contributed $2.86 billion, exceeding the $2.68 billion StreetAccount consensus and increasing by 81%.

Nvidia provided guidance for the fiscal fourth quarter that called for $20 billion in revenue. That suggests a revenue growth of almost 231%.

Nvidia unveiled the GH200 GPU during the quarter; it sports an extra Arm processor and more memory than the H100. The H100 is a popular and pricey device. According to Nvidia, Iris Energy, an Australian company that owns data centers used for bitcoin mining, is purchasing 248 H100s for $10 million, or roughly $40,000.

According to Kress during the call, Oracle’s cloud will soon offer computing instances based on GH GPUs.

Sales of GPUs for PC video gameplay were Nvidia’s main source of income until about two years ago. These days, server farm deployments generate the majority of the company’s income.

Following the release of OpenAI’s ChatGPT chatbot in 2022, a Microsoft-backed startup, numerous businesses began searching for methods to incorporate generative artificial intelligence features into their software. As a result, the market for Nvidia’s GPUs grew stronger.

Among the challenges Nvidia faces are AMD’s rivalry and reduced earnings due to export limitations that may restrict the company’s ability to sell GPUs in China. Nonetheless, some analysts were upbeat prior to the Tuesday report.

GPU demand continues to outpace supply as Gen AI adoption broadens across industry verticals,” Raymond James’ Srini Pajjuri and Jacob Silverman wrote in a note Monday to clients, with a “strong buy” recommendation on Nvidia stock. “We are not overly concerned about competition and expect NVDA to maintain >85% share in Gen AI accelerators even in 2024.”

During the call, Kress stated that Nvidia is still working on its plan to increase supply throughout the upcoming year.

With the exception of the after-hours trade, Nvidia’s stock has increased 241% so far this year, outpacing the S&P 500 index’s 18% gain during the same time frame.

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