Quarterly figures: AI boom keeps chip group Nvidia on record course

Quarterly figures: AI boom keeps chip group Nvidia on record course

Nvidia is the current star of the chip industry. AI software like ChatGPT requires technology from the company that was once known primarily for graphics cards. Nvidia sees the change in the computer world only at the beginning.

The AI ​​boom is causing the business of the chip company Nvidia to grow explosively. The Silicon Valley company doubled its sales year-on-year to $13.5 billion last quarter.

Profits jumped from $656 million to just under $6.2 billion (5.7 billion euros). Nvidia boss and co-founder Jensen Huang sees a new computer era dawning.

Chips and software from Nvidia are particularly well suited for applications based on artificial intelligence. Among other things, they are used to teach AI programs such as the chatbot ChatGPT. This has been driving demand for the technology – and Nvidia’s share price – for months. The stock is more than three times what it was at the beginning of the year. As a result, Nvidia is worth around $1.2 trillion on the stock exchange. By way of comparison, the long-dominant semiconductor giant Intel weighs in at just over $143 billion.

Huge demand

In after-hours trading, Nvidia shares rose about 6.5 percent. The company exceeded the already high expectations of the analysts both with the figures for the past quarter and with the forecast for the third business quarter running until the end of October. Nvidia expects a further increase in sales to around 16 billion dollars. The company had realized almost as much in the entire financial year that ended at the end of January 2021.

Huang emphasized that the world’s data centers are currently showing a “long-term change” from classic processors to the chip architectures offered by Nvidia. The demand is huge.

One concern from analysts was that Nvidia might not be able to secure enough manufacturing capacity from contract manufacturers. The numbers allayed such concerns.

Nvidia against tightening US restrictions

There was a particularly large jump in the last quarter in the business with technology for data centers. Revenue for the division rose 171 percent year-on-year to $10.32 billion. Many AI applications are running in data centers and the systems are therefore being upgraded with more and more Nvidia chips.

The gaming business with Nvidia graphics cards grew by 22 percent to $2.49 billion. They were once a major growth driver because they were used to create cryptocurrencies.

Nvidia spoke out against tightening US restrictions on semiconductor shipments to China. The current measures served their purpose, said CFO Colette Kress.

At Nvidia, revenue from China accounted for between 20 and 25 percent of data center business as usual in the past quarter. In view of the worldwide demand, Nvidia does not expect any immediate significant losses, even in the event of further possible restrictions. But in the long term this will destroy the chances of the US chip industry in the huge Chinese market.

Source: Stern

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