AI boom drives share price
Nvidia exceeds all expectations
08/23/2023 11:29 p.m
Investors around the world are looking forward to Nvidia’s business figures and the most valuable listed chip manufacturer is delivering even more than expected: Thanks to the AI boom, the group wants to increase its sales to $16 billion in the third quarter.
The chip group Nvidia continued to benefit from the strong demand for applications with artificial intelligence (AI) in the second quarter. Market expectations were clearly exceeded. The stock gained 8.9 percent in after-hours trading shortly after the figures were released.
Fueled by high chip demand for AI applications in data centers, revenue rose to a record $13.51 billion from $6.7 billion in the year-ago quarter, with data center revenue up 141 percent to $10.32 billion . Net income increased to $6.19 billion, or $2.48 per share, from $656 million, or $0.26 per share, in the same period last year. Adjusted earnings were $2.70 per share, up from $0.51 a year earlier.
So far without competitors
According to Factset, analysts had expected sales of $11.19 billion and profits of $4.73 billion on average. For the current quarter, the group announced a further increase in sales. Nvidia expects sales of $15.68 to $16.32 billion for the third quarter. Analysts had expected sales of $12.59 billion.
The demand for computing power for AI applications such as ChatGPT gives Nvidia and others enormous sales potential. The new possibilities have triggered fierce competition among tech companies such as Microsoft, Google and Facebook for advanced AI applications. According to analysts, Nvidia chips play an important role. Manufacturing just one AI system can require thousands of Nvidia chips. Nvidia has been investing in developing chips and software for AI for more than a decade and so far has no competitor to match the company.