Finance & Economics

NVIDIA Reports Record Sales

NVIDIA has reported an increase in its sales to a record level amid a rapid growth in demand for artificial intelligence chips.

NVIDIA Reports Record Sales

According to the results of the second quarter of 2023, this technology giant recorded a revenue figure of $13.5 billion. This indicator is 101% higher than the result of a year ago. Revenue for the last quarter was a record for the company.

The tech giant’s non-GAAP adjusted earnings increased 429% compared to the second quarter of 2022, amounting to $2.7 per share.

The company also predicts that sales dynamics will have the same vector in the current quarter. Currently, the tech giant has a plan to buy back its shares for $25 billion.

At the extended auction in New York, the company’s share price showed an increase of more than 6.5%.

By the end of the third quarter of 2023, the technology giant expects to receive revenue of about $16 billion. This indicator, which is a kind of goal for the company and at the same time has some symbolic meaning of the horizon of desires, significantly exceeds the expectations of Wall Street analysts. If the financial indicator of the activity reaches the level expected by the firm, revenue growth of 170% year-on-year will be recorded.

The preliminary forecast of the technology giant does not seem to be a fantasy divorced from the real state of affairs or an unrealizable dream if recall the results for the last quarter, which turned out to be quite outstanding. In addition, the external global context is conducive to improving the financial situation of the company. Currently, there is a worldwide transition from universal to accelerated computing and generative artificial intelligence around the world. NVIDIA chips are a sought-after commodity in this context.

Currently, the technology giant is active in the area of data centers, which includes AI chips. According to the results of the last quarter, the division of the firm of the corresponding profile received revenue of more than $10.3 billion, which indicates an increase of more than 170% year-on-year. Cloud computing service providers and large consumer Internet companies are demonstrating a high level of consumer activity this year.

NVIDIA CFO Colette Kress announced the huge demand for the technology giant’s platform for data centers for artificial intelligence. She also noted that this demand covers all industries and customers.

In 2023, the market value of NVIDIA shares exceeded the historically significant figure of $1 trillion. The value of the companies’ shares has more than tripled since the beginning of the year. Against this background, the tech giant became the fifth publicly traded American firm to join the so-called trillion-dollar club, along with Apple, Microsoft, Alphabet, and Amazon.

Sarah Kunst, managing director of Cleo Capital, which invests in startups, noted during a conversation with journalists that NVIDIA launched chip production a long time ago, but the market has only realized this in the last couple of years.

Information and analytical company Morningstar upgraded the rating of the technology giant to withheld after the financial results of the brand’s activities in the last quarter were released. NVIDIA currently has 54 buy ratings and five holds.

Morningstar forms rating positions based on the current value of the shares, the analysis of the fair price, and the uncertainty indicator of this assessment. The technology giant’s fair value was increased from $300 to $480 per share. Analysts expect the company’s data center business, including graphics processors with artificial intelligence, to generate revenue of $41 billion in the fiscal year ending January 2024. A year earlier, this figure was $15 billion.

Analyst Brian Colello says that the current growth in orders for GPUs has no signs of a strictly time-limited phenomenon, noting that there is extremely little evidence that in this case demand exists in the format of advance expenses or is due to a one-time build. According to his forecasts, next year the sales of the data center business could reach $60 billion, and in five years this figure could increase to $100 billion. He also noted signs that enterprises of all types will invest in artificial intelligence.

At the beginning of its activity, the technology giant produced chips for computers that process graphics. Currently, most artificial intelligence applications use the company’s hardware. There is information that the share of the technology giant in the machine learning market is 95%. For example, ChatGPT was trained using 10,000 NVIDIA GPUs.

As we have reported earlier, NVIDIA and VMware to Accelerate Generative AI Adoption.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.