Nvidia’s revenue increased 262 percent in the last quarter due to record sales of artificial-intelligence chips. This growth exceeded expectations and the company’s chief executive stated that the blockbuster growth would continue this year, with the introduction of a new chip line.
Jensen Huang, the CEO of the company, told investors that the new Blackwell chips would generate “a lot” in revenue this year. This is due to the exploding market for computing power used for generative AI.
Huang stated that Blackwell would contribute to the new phase of growth in the company. He added that Nvidia will continue rolling out more powerful chips with the same speed. He said that after Blackwell there will be another chip and Nvidia is on a year-long rhythm.
The demand for Nvidia’s AI graphics processing units in data centres has soared over the last year, as the largest tech companies race to build the computing infrastructure required to deliver powerful AI products on a large scale. Google, Microsoft Meta, and Amazon all stated that they would continue to spend a lot of money until 2024.
The revenue for the three-month period ending in April came to $26bn, compared with the consensus estimate of $24.7bn. The huge increase in comparison to last year was the same as for the previous quarter when growth reached 265%. Nvidia estimates revenue for the current quarter of approximately $28bn plus or minus 2%, compared to consensus estimates of $26.8bn.
Colette Kress, Nvidia’s chief financial officer, told investors that Nvidia’s data centre revenue – which is related to its highly coveted AI chip – was up by 427 percent year over year in the first quarter, to $22.6 billion. This was due to strong demand for Nvidia’s current generation Hopper GPUs. Blackwell chips are expected to be shipped this quarter.
Nvidia stocks, which have risen by over 90 percent since the beginning of the year, rose about 6 percent in after-hours trade. The chipmaker announced a 10-for-1 split of its stock, effective June 7, and increased its quarterly dividend by 150 percent.
Before the announcement of results, traders were bracing themselves for large swings both in Nvidia’s shares and the markets as a whole. It is now one of Wall Street’s most closely-watched names due to the stock’s huge rally. Since 2023, its market cap has grown six-fold. It now ranks third in the US listed companies.
Nvidia is moving fast to capitalize on the demand for AI, and keep up with competitors and customers who are developing their AI chips. It announced in March its Blackwell chips, which are said to be twice as powerful than the current generation of AI chips and five times faster at “inference”, the speed that such models can answer queries. The company announced its previous generation GPU chip architecture Hopper just one year earlier. Blackwell should start shipping by the end of this year.
Analysts questioned if the transition to the new product line would affect the massive growth year-over-year that Nvidia had recorded in previous quarters as a temporary “airpocket” of demand emerged. Amazon, for instance, has changed plans and ordered Blackwell chips instead of the previous generation.
Huang assured investors that the demand for the Hopper and Blackwell line was “way in front of supply”, which would likely continue “well into the next year”.
Earnings per share diluted were $5.98. This is up 600% from the previous year. Gross margin was slightly higher than analysts’ expectations of 77 percent, and net income came in at $14.9 billion, a dollar amount that exceeded the $13.2 billion expected.
AMD and Intel are launching AI-based data center chips to compete against Nvidia. is also partnering with Nvidia clients to provide alternatives to Cuda’s software platform.
Intel and AMD released modest first-quarter guidance and results in April, indicating that they have yet to benefit from the surge in demand. Microsoft announced on Tuesday that it will be using AMD’s MI300X accelerator chip and its ROCm ROCm software in order to run some AI workloads with the highest demands.
Daniel Newman is the chief executive officer of The Futurum Group. He said that Nvidia had beaten the competition in the data center [revenue] category. The whole market waited for this number, and Nvidia delivered.
He added that the stock split would provide “more accessibility”, as well as “additional energy for the stock”. The AI trade is still alive and well.
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