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Nvidia’s only problem is building enough AI chips to meet demand, which CEO Jensen Huang says is not only “really strong” but which, the executive predicts, will outstrip production capacity and availability until next year. : these are the CEO’s comments on the spectacular results of the first quarter of 2024 which further establish Nvidia as the queen, for now absolute, of the chips and servers essential for artificial intelligence AI.
First the numbers: last year in the first quarter of 2023 the turnover was 7.19 billion dollars, while in the first quarter of this year it jumped to 26 billion dollars with a triple-digit percentage increase of 262%.
Even more massive triple-digit jump for earnings per share which reached $6.12, a growth of 461%. Analysts expected 5.65 dollars in earnings per share and 24.69 billion in revenue: not only did the company exceed its already ambitious forecasts, recording an operating profit of 14 billion dollars in the first three months of this year, but it expects that all this will continue.
Nvidia chips are selling like hotcakes because AI saves and makes money
The CEO of Nvidia refers to the sender the doubts about the stability of the demand for the current H100 chips with Hopper architecture, given that Nvidia has already presented the new B200 model based on the new Blackwell architecture which promises another leap in terms of performance and reduction in power consumption power.
But even with a generational leap underway, demand for Nvidia’s AI chips continues to be fueled not only by tech giants and hyperscalers, but increasingly by corporations and governments as well. Interviewed by Yahoo Finance Jensen Huang explains why
“Everyone is eager to get their infrastructure online. And the reason is that they are saving and earning money and would like to do it as soon as possible.”
Adopting AI saves a lot of money and makes you earn money: Nvidia chips are expensive but it’s better to have them now. Also because the power supply and mechanics remain the same, this facilitates the transition and upgrade of servers and data centers with previous Nvidia chips.
The competitors will arrive, perhaps
All the giants and dozens of startups are designing and churning out AI chips: so far no one has managed to undermine the Nvidia domination, but the situation could change. In its guidelines for the current second quarter, Nvidia expects a turnover of 28 billion dollars, with a difference of 2% positive or negative, again exceeding analysts’ forecasts of 26.6 billion.
We will see some beautiful and interesting ones because if the competition runs, Nvidia perhaps does it even more. Huang anticipates an avalanche of new chips of all types arriving: the introduction cadence of new GPU architectures goes from biennial to annual.
But chips for communications, servers, networks are planned: Jensen declares that every single element of Nvidia’s AI machines is the top of the technology and works at maximum performance. And in another interview Huang hints that sooner or later Nvidia computer chips will arrive that will challenge Intel, AMD and even Qualcomm.
Another surprise for shareholders from Nvidia’s first quarter results
The record results come with another announcement that will give another jolt to NVDA shares on the stock market. In the aftermarket Nvidia reports an increase of 6%, but when trading starts the jump could be higher: the company has announced a 10-to-1 stock split.
A single Nvidia share with a valuation of around $980 will be split into 10 shares worth around $98, making the stock more attractive and affordable for employees and small investors. Articles that talk about Nvidia are available here, while for news that talk about Artificial Intelligence, please refer to the dedicated section of macitynet.
