Jensen Huang, the boss of Nvidia
Jensen Huang can rub his hands. The boss of the American graphics chip giant Nvidia has just published the company’s results for the second quarter of its fiscal year 2024, and as much to say that they are insolent. Revenues have doubled in one year, to $13.5 billion between May and July 2023. As for profits, they have taken more than 800%, to $6.2 billion. Data centers represent $10.3 billion in revenue, a record, more than double the previous quarter. Gaming also saw its weight increase, to 2.48 billion dollars (+22%).
The trend for the next few months should not be reversed, predicts the group. Indeed, Nvidia forecasts revenues of 16 billion dollars for the next quarter, while analysts were more timorous, counting on them for 12.6 billion dollars. Such health necessarily has an immediate effect on the stock market, which saw the title of Nvidia take off by 8% in the exchanges after the closing of the financial markets.
The weight of data centers… and of China
Nvidia owes this excellent financial situation to the boom in artificial intelligence observed in recent months. Nvidia chips are popular for running language models like OpenAI’s ChatGPT. And they also run the data centers of cloud giants such as Amazon, Microsoft and Google.
Nvidia was reassuring about its supplies, which has its chips manufactured mainly by the Taiwanese TSMC, or the Chinese Foxconn. “Our supply over the next few quarters will continue to increase as we reduce production cycle time and we are working with our partners to increase our capacities.“said Colette Kress, the group’s chief financial officer.
Downside, China represents nearly a quarter of Nvidia’s revenues, and the restrictions put in place by the United States could penalize the group in the future. Washington is worried about the use of AI by the Middle Kingdom and has therefore banned the export of the most advanced chips to China. However, Nvidia thinks it will be difficult to cut itself off from this market in the future.
The group must also anticipate competition from groups like AMD or Intel, which are also eyeing the juicy AI market. AMD is expected to roll out its MI300 chip in early 2024. As for Intel, its goal is to put AI in all of its platforms.
Source: Nvidia, The echoesThe Verge