Santa Clara, February 21, 2024, The Europe Today: Nvidia Corporation projected a remarkable threefold surge in quarterly revenue, surpassing estimates and reflecting the insatiable demand for its cutting-edge artificial intelligence (AI) chips. The robust performance has sent the company’s shares soaring by 10% in after-hours trading.
As companies globally strive to enhance their AI capabilities, the demand for Nvidia’s data center chips and graphics processing units (GPUs) continues to skyrocket. Nvidia’s dominance in the global AI chip market, with notable clients such as Microsoft, has propelled its market capitalization, witnessing a late-day surge of over $129 billion. This surge has also contributed to the collective market value of AI-related companies, adding a substantial $160 billion.
Investing.com analyst Thomas Monteiro remarked, “The AI boom is much more than just a stock market narrative, but rather, the most significant bet from corporations worldwide at this moment.” Despite high expectations and challenging macro conditions, Nvidia has proven the enduring strength of the AI sector.
For the first quarter of the fiscal year, Nvidia anticipates a remarkable revenue growth of 233%, surpassing Wall Street expectations of 208%. The company has consistently outperformed analyst estimates, reporting quarterly revenue for the first three quarters of 2023 that exceeded predictions by 10% to 20%.
While the data center segment, its largest by revenue share, experienced a staggering 409% growth to $18.4 billion in the fiscal fourth quarter, Nvidia’s supply chains are gradually improving. However, CEO Jensen Huang acknowledged the challenges of meeting the soaring demand, stating that the company cannot “reasonably” keep up with demand in the short term as production ramps up.
Despite the extraordinary success, some analysts have raised questions about the sustainability of Nvidia’s rapid growth. The company’s forecast for the current quarter predicts revenue of $24.0 billion, plus or minus 2%, surpassing the average analyst expectation of $22.17 billion, according to LSEG data. As Nvidia continues to shape the future of AI computing, the industry watches closely to see how the company navigates the evolving landscape.
