Nvidia blasts earnings expectations with shares hitting all-time high

August 24, 2023


Nvidia Corp disclosed that its revenue for the most recent quarter more than doubled, shattering analyst’s expectations.

This surge has been primarily driven by skyrocketing demand for the company’s essential processors to train advanced AI systems.

Nvidia went beyond merely reporting stellar earnings – they also showed that the company is overcoming manufacturing and supply chain challenges faster than anticipated.

When the markets opened yesterday, Nvidia’s stock climbed 6% to $502 per share.

This punctuates a meteoric rise for the company, whose market capitalization has tripled over the course of the year to surpass $1.2 trillion.

Nvidia’s robust performance has established it as a cornerstone in the broader tech market rally sweeping the US.

Market analysts had been optimistic, predicting revenue in the vicinity of $11.15bn for the previous quarter and around $12.5bn for the current one.

Nvidia, however, exceeded these informal projections by posting a revenue of $13.51bn for the last quarter, compared to $6.7bn during the same period in the previous year.

Looking forward, the company anticipates a revenue of $16bn for the October quarter – a figure initially not expected until next year.

GPUs leading the charge

The engines behind Nvidia’s stellar growth are its high-end GPUs, including the A100 and H100, which have become the industry standard for training AI models. CEO Jensen Huang remarked that top-tier cloud computing firms have revealed “massive infrastructures” for the upcoming quarter, powered by Nvidia’s latest AI chips.

Both China and the Gulf states ramped up their GPU purchases, with China submitting orders worth a reported $5bn.

The company also announced the new GH200, designed to be bigger, better, and more energy-efficient than its predecessors. 

Huang emphasized that the current trends represent a long-term shift in the industry toward “accelerated computing and generative AI.”

Wall Street analysts had a flurry of questions about the sustainability of this growth spurt. Huang reiterated that the current uptick in demand for Nvidia’s chips was not a short-term anomaly but a secular shift in the data center landscape.

Despite the global geopolitical climate and US restrictions on AI chip exports to China, Nvidia has shown resilience. For instance, Nvidia shrewdly designed the A800, a Chinese export-friendly version of the A100 with 30% reduced computing power. 

According to Chief Financial Officer Colette Kress, sales to China constituted between 20 to 25% of Nvidia’s data center revenue for the last quarter. She maintained that existing US regulations achieved their intended purpose without hampering the company’s performance in the Chinese market.

All this culminated in an astonishing rise in after-tax profits for Nvidia, reaching nearly $6.2bn, up from just over $2bn last year.

This strong financial performance underscores Nvidia’s role as an industry leader at a time when AI is dramatically shaping technological advancements.

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Sam Jeans

Sam is a science and technology writer who has worked in various AI startups. When he’s not writing, he can be found reading medical journals or digging through boxes of vinyl records.


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