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Nvidia’s revenue surges by 265% due to booming AI business

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Nvidia surpassed Wall Street’s expectations for fourth fiscal quarter earnings and sales, projecting even stronger revenue for the current quarter, despite already high expectations for significant growth.

 As a result, Nvidia’s shares surged approximately 10% in after-hours trading.

Here’s how the company’s quarterly results compared to analysts’ expectations, according to a survey conducted by LSEG (formerly Refinitiv), for the quarter ending in January:

  • Adjusted earnings per share: $5.16, exceeding the expected $4.64
  • Revenue: $22.10 billion, surpassing the anticipated $20.62 billion

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Nvidia forecasted $24.0 billion in sales for the current quarter, exceeding analysts’ expectations of $5.00 per share on $22.17 billion in sales, according to LSEG polls.

The company has thrived amid the recent tech industry focus on expansive artificial intelligence models, leveraging its costly graphics processors tailored for server use.

During a call with analysts, Nvidia CEO Jensen Huang addressed concerns among investors about sustaining this growth and sales momentum throughout the year.

Huang assured analysts that the conditions are favorable for sustained growth beyond 2025. He highlighted persistent demand for Nvidia’s GPUs, driven by generative AI and a broader industry shift towards accelerators over central processors.

In the quarter, Nvidia posted a net income of $12.29 billion, or $4.93 per share, marking a significant surge from last year’s $1.41 billion or 57 cents per share.

The company’s total revenue soared 265% year-over-year, fueled by robust sales of AI chips for servers, notably the “Hopper” chips like the H100.

“The company attributed strong demand to enterprise software, consumer internet applications, and various industries such as automotive, financial services, and healthcare,” stated in commentary shared with investors.

The majority of Nvidia’s revenue comes from its Data Center business, which saw a 409% increase to $18.40 billion. More than half of these sales were to major cloud providers.

However, Nvidia’s data center revenue was impacted by recent U.S. restrictions on exporting advanced AI semiconductors to China.

“We understood the restrictions, reconfigured our products to ensure they are not susceptible to software hacks, which took some time. Now we’re sampling to customers in China,” explained Huang.”

Nvidia’s CFO, Colette Kress, acknowledged that while the supply of AI GPUs had improved, there’s still an expected shortage, particularly for the upcoming B100 chip.

“We’re pleased with the improving supply of Hopper architecture products,” Kress told analysts. “However, demand for Hopper remains high, and our next-generation products will likely face supply constraints due to overwhelming demand.”

“When we introduce new products, the ramp-up process takes time,” added Huang.

Nvidia’s gaming sector, encompassing graphics cards for laptops and PCs, saw a modest 56% year-over-year increase to $2.87 billion. Despite its previous dominance, gaming cards now share the spotlight with AI chips.

Nvidia’s automotive sales dipped 4% to $281 million, while its OEM and miscellaneous business, including crypto chips, saw a 7% rise to $90 million. On the other hand, the segment supplying graphics hardware for professional use saw an impressive 105% surge to $463 million.

What is Nvidia famous for?

Nvidia is a top fabless designer of GPUs, crucial for enhancing graphic processing and memory acceleration in computers, notably in gaming. It’s renowned for CUDA API, empowering software development across industries. Nvidia chips dominate in data centers, supercomputing, and AI, and it’s credited with pioneering the system-on-a-chip design.

You might also be interested in – Nvidia surpasses Tesla as the most traded stock on Wall Street

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