Nvidia announced record quarterly revenues on Wednesday, fueled by the explosive growth in artificial intelligence adoption among corporations.
Jensen Huang is the founder and CEO of Nvidia. He said, “The next Industrial Revolution has begun. Companies and countries are working with Nvidia to create a new commodity – artificial intelligence.”
In the first quarter fiscal year 2025, the company generated $26bn of revenue. This is up 18% compared to Q4 and 262% compared to a year earlier. Net profit increased from $2bn to $14.88bn in the first quarter of fiscal year 2025.
Investors had expected revenue of $24.65bn and earnings per share of $5.59, according to CNBC. CNBC said that investors had been expecting revenue of $24.65bn, and earnings per share at $5.59. The company announced that it would also split its stock at $962 into 10 shares for every one on 7th June.
Investors were expecting another set of blockbuster financial results. But they also wanted confirmation that the big tech companies’ spending on Nvidia chips would be as impressive as expected. It was.
Jacob Bourne, an analyst at eMarketer, said: “Nvidia continues to defy gravity as AI companies around the world continue to rely on its chipsets and networking hardware.
Bourne stated that the tech giants’ public praise for Nvidia is “a telling sign of its dominance” and they are trying to reduce their dependency on the company, but “realize they’re still not there yet”.
Amazon, Google Meta, Microsoft and Meta have all announced that they will spend $200bn on chips and datacenters this year to train and run their AI systems. Apple announced that it would announce its AI strategy in the next month. Nvidia chips are considered the best for AI.
This year, the company’s value has increased by more than $1tn. Nvidia’s value was $359bn at the end of 2022. Halfway through 2024 it is worth $2.33tn. This is only $500bn below Apple and $900bn below Microsoft, two of the most valuable US-based companies.
Henry Allen, a Deutsche Bank strategist, said that the announcement of chipmaker earnings “has now become one the most important macro events”, according to the macro calendar.
Analysts warn that stocks do not always move in a straight upward direction. Nvidia has a price-to earnings (P/E ratio) of 79.95 to one. Microsoft’s P/E ratio is 36 and Apple’s 29. Nvidia also makes nearly $0.50 in net profit for every dollar of sales.
Can it meet the demand? Nvidia chips are so popular that they’re now delivered by armored cars. Amazon, one of its major customers, told the Financial Times that it was awaiting orders for Nvidia’s new superchip Blackwell.
China is also a concern. The administration, in line with its crackdown on Chinese electric vehicles, has prohibited the company from selling their highest-end semiconductors to China.
Dan Ives, Wedbush Securities, says that after the results have been announced, investors will listen closely to AI “godfather” Jensen. He says that the AI revolution began with Nvidia and, in his opinion, the AI party was just beginning.
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