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Nvidia Corp. surged in early trading after delivering another eye-popping sales forecast, adding fresh momentum to a stock rally that already made it the world’s most valuable chipmaker.
Revenue in the current period will be about $24 billion, the company said in a statement Wednesday. Analysts had predicted $21.9 billion on average. Results in the fourth quarter also sailed past Wall Street estimates.
The outlook extends a streak of Nvidia shattering expectations, thanks to insatiable demand for its artificial intelligence accelerators — highly prized chips that crunch data for AI models. The technology has helped power a proliferation of chatbots and other generative AI services, which can create text and graphics based on simple prompts.
“Accelerated computing and generative AI have hit the tipping point,” Chief Executive Officer Jensen Huang said in the statement. “Demand is surging worldwide across companies, industries and nations.”
The shares jumped about 13% in premarket trading on Thursday following the announcement. They earlier closed at $674.72 in New York, leaving them up 36% for the year.
Nvidia’s market capitalization increased by more than $400 billion this year — bringing its valuation to $1.7 trillion — as investors bet that the company will remain the prime beneficiary of an AI computing boom.
On a conference call with analysts, Huang said that demand for Nvidia’s newest products will continue to outstrip supply for the rest of the year. Though supply is growing, demand isn’t showing any signs of slowing, he said.
“Generative AI has kicked off a whole new investment cycle,” Huang said. That will lead to a doubling of the world’s data center installed base over the next five years and “represent an annual market opportunity in the hundreds of billions,” he said.
Nvidia, co-founded by Huang in 1993, got its start as a provider of graphics cards for computer gamers. Its profile blew up in the last two years, when its technology proved adept at handling heavy AI workloads. The company’s H100 accelerators have become legendary in the tech world, with customers scrambling to get their hands on as many as possible.
In the fiscal fourth quarter, which ended Jan 28, Nvidia’s revenue more than tripled to $22.1 billion. Profit excluding certain items was $5.16 a share. Analysts had predicted sales of about $20.4 billion and earnings of $4.60 a share. Underscoring the magnitude of its recent growth streak: As recently as 2021, Nvidia didn’t generate that much revenue in an entire year.
Nvidia’s data center division, now by far its largest source of sales, generated $18.4 billion of revenue, up 409% from the same period a year earlier. Gaming chips provided $2.87 billion of sales.
Nvidia is now working to spread its AI technology beyond the big data-center companies. Huang, 61, has traveled the globe arguing that governments and corporations need their own AI systems — both to protect their data and gain a competitive advantage.
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