Current:Home > InvestNvidia’s rising star gets even brighter with another stellar quarter propelled by sales of AI chips-Angel Dreamer Wealth Society D1 Reviews & Insights
Nvidia’s rising star gets even brighter with another stellar quarter propelled by sales of AI chips
View Date:2024-12-23 19:56:55
SAN FRANCISCO (AP) — Computer chip maker Nvidia has rocketed into the constellation of Big Tech’s brightest stars while riding the artificial intelligence craze that’s fueling red-hot demand for its technology.
The latest evidence of Nvidia’s ascendance emerged with Wednesday’s release of the company’s quarterly earnings report. The results covering the May-July period exceeded Nvidia’s projections for astronomical sales growth propelled by the company’s specialized chips — key components that help power different forms of artificial intelligence, such as Open AI’s popular ChatGPT and Google’s Bard chatbots.
“This is a new computing platform, if you will, a new computing transition that is happening,” Nvidia CEO Jensen Huang said Wednesday during a conference call with analysts.
Nvidia’s revenue for its fiscal second quarter doubled from the same time last year to $13.51 billion, culminating in a profit of $6.2 billion, or $2.48 per share, more than nine times more than the company made a year ago. Both figures were well above the projections of analysts polled by FactSet Research.
And the momentum is still building. The Santa Clara, California, company predicted its revenue for its August-October quarter will total $16 billion, nearly tripling its sales from the same time last year. Analysts had been anticipating $12.6 billion in revenue for that period encompassing Nvidia’s fiscal third quarter, according to FactSet.
Nvidia’s stock price surged 6% in extended trading after the numbers came out. The shares already have more than tripled so far this year, a run-up that has boosted Nvidia’s market value to $1.2 trillion — a threshold that thrust the company into the tech industry’s elite. If stock rises similarly during Thursday’s regular trading session, it will mark yet another record high for Nvidia’s shares and boost the company’s market value by another $75 billion or so.
Other stalwarts that are currently or have been recently valued at $1 trillion or above are Apple, Microsoft, Amazon and Google’s corporate parent Alphabet.
Now all those tech giants as well as a long line of other firms are snapping up Nvidia chips as they wade deeper into AI — a movement that’s enabling cars to drive by themselves, and automating the creation of stories, art and music.
Nvidia has carved out an early lead in the hardware and software needed in the AI-focused shift, partly because Huang began to nudge the company into what was then seen as a still half-baked technology more than a decade ago. While others were still debating the merits of AI, Huang already was looking at ways that Nvidia chipsets known as graphics processing units might be tweaked for AI-related applications to expand beyond their early inroads in video gaming.
By 2018, Huang was convinced that AI would trigger a tectonic shift in technology similar to Apple’s 2007 introduction of the iPhone igniting a mobile computing revolution. That conclusion led Huang into what resulted in what he calls a “bet-the-company moment.” At the time Huang doubled down on AI, Nvidia’s market value stood at about $120 billion.
“I think it’s safe to say it was worth it to bet the company” on AI, Huang, 60, said during a presentation earlier this month.
Huang’s foresight gave Nvidia a head start in designing software to complement its chips tailored for AI applications, creating “a moat” that other major chipmakers such as Intel and AMD are having trouble getting around during a period of intense demand that is expected to continue into next year, said Bernstein analyst Stacy Rasgon. Nvidia is increasingly pitching a Lego-like combination of GPUs, memory chips and more conventional processing chips enclosed in a big package. In a demonstration earlier this month, Huang showed one such room-sized structure, joking about how it might look if delivered to a doorstep by Amazon.
“Everybody else is trying to catch them now that they see the opportunity is there.” Rasgon said.
Huang’s vision has prompted Wedbush Securities analyst Dan Ives to hail him as “the Godfather of AI,” and established him as one of the world’s wealthiest people with an estimated fortune of $42 billion.
While Ives still sees plenty of upside in Nvidia’s future growth and stock price, other market observers believe investors are getting carried away.
“This level of hype is dangerous as it could lead investors to assume that these stocks are a silver bullet to build long-term wealth — and they are not, at least not on their own,” warned Nigel Green, CEO of deVere Group.
___
O’Brien reported from Providence, Rhode Island.
veryGood! (49956)
Related
- Steelers' Mike Tomlin shuts down Jayden Daniels Lamar comparison: 'That's Mr. Jackson'
- Edgar Bronfman Jr. withdraws offer for Paramount, allowing Skydance merger to go ahead
- Yes, SPF for Pets Is a Thing: 15 Must-Have Sun Protection Picks for Dogs, Including Sprays, Shirts & More
- EPA Thought Industry-Funded Scientists Could Support Its Conclusion that a Long-Regulated Pesticide Is Not a Cancer Risk
- Biden funded new factories and infrastructure projects, but Trump might get to cut the ribbons
- Special counsel urges appeals court to reinstate classified documents case against Trump
- Noel and Liam Gallagher announce Oasis tour after spat, 15-year hiatus
- Edgar Bronfman Jr. withdraws offer for Paramount, allowing Skydance merger to go ahead
- Brush fire erupts in Brooklyn's iconic Prospect Park amid prolonged drought
- Stormy sky and rainbow created quite a scene above Minnesota Twins’ Target Field
Ranking
- Will Trump curb transgender rights? After election, community prepares for worst
- Can you actually get pregnant during your period? What an OB/GYN needs you to know.
- 1 killed in interstate crash involving truck carrying ‘potentially explosive’ military devices
- Embrace the smoke, and other tips for grilling vegetables at a Labor Day barbecue
- North Carolina offers schools $1 million to help take students on field trips
- Nationals' Dylan Crews makes MLB debut on LSU teammate Paul Skenes' heels
- South Carolina Supreme Court to decide minimum time between executions
- Mother of high school QB headed to Tennessee sues state of North Carolina over NIL restrictions
Recommendation
-
When does 'Dune: Prophecy' come out? Release date, cast, where to watch prequel series
-
Unusually cold storm that frosted West Coast peaks provided a hint of winter in August
-
Dominic Thiem finally gets celebratory sendoff at US Open in final Grand Slam appearance
-
Mariah Carey’s mother and sister died on the same day. The singer says her ‘heart is broken’
-
Investigation into Chinese hacking reveals ‘broad and significant’ spying effort, FBI says
-
'Only Murders' doesn't change at all in Season 4. Maybe that works for you!
-
Jenna Ortega Slams “Insane” Johnny Depp Dating Rumors
-
Alabama man shot by police during domestic violence call