Nvidia posts revenue up 265% on booming AI business

22.02.2024

Nvidia exceeded Wall Street expectations in its fourth fiscal quarter earnings report, revealing adjusted earnings per share of $5.16 compared to the expected $4.64 and revenue of $22.10 billion against the anticipated $20.62 billion. The company’s stock saw a 10% surge in after-hours trading. For the current quarter, Nvidia projected $24.0 billion in sales, surpassing analysts’ predictions of $5.00 per share on $22.17 billion in sales.

The growth has been primarily attributed to the rising demand for large artificial intelligence models, developed using Nvidia’s high-performance graphics processors for servers. CEO Jensen Huang addressed concerns about sustaining this growth, assuring analysts that the conditions are favorable for continued expansion in 2025 and beyond. He emphasized sustained GPU demand driven by generative AI and the industry’s shift from central processors to Nvidia’s accelerators.

Nvidia reported a staggering $12.29 billion in net income for the quarter, a 769% increase from the previous year. The total revenue soared by 265%, fueled by robust sales of AI chips for servers, particularly the Hopper chips like the H100. The Data Center business, now the majority of Nvidia’s revenue, witnessed a 409% increase to $18.40 billion, with over half of the data center sales directed to major cloud providers.

However, the company acknowledged challenges, such as U.S. restrictions impacting data center revenue related to exporting advanced AI semiconductors to China. Despite improvements in the supply of AI GPUs, Nvidia anticipates continued shortages, especially for the upcoming B100 chip expected later this year. The gaming business, which was Nvidia’s primary focus before the AI boom, increased by 56% to $2.87 billion.

On the flip side, the automotive business experienced a 4% decline to $281 million, while the OEM and other business, including crypto chips, rose by 7% to $90 million. The graphics hardware business for professional applications surged by 105% to $463 million. In summary, while Nvidia faces some challenges, its overall performance remains strong, driven by the sustained demand for its GPUs in various sectors.