Nvidia, the American artificial intelligence chip giant, announced quarterly revenues of $96.2 billion, more than double the same period last year, exceeding Wall Street expectations, while the company provided forecasts indicating continued strong sales in the coming period.
The company's stock jumped nearly 5 percent in after-hours trading on Wall Street following the earnings announcement. However, Nvidia's stock gains this year were only 13 percent as of Tuesday's close, while AMD and Intel shares more than doubled.
Nvidia is a key indicator of the accelerating pace of global spending on artificial intelligence, as its results depend heavily on the massive purchases by technology and AI companies, including OpenAI, Amazon, Microsoft, and XAI.
The company's CEO, Jensen Huang, said in a statement: The construction of the artificial intelligence infrastructure is proceeding at full speed.
Strong growth exceeding expectations
Nvidia's revenue for the quarter ending July 26 rose 106 percent year-over-year and 18 percent compared to the previous three months, clearly exceeding analysts' estimates of around $92 billion.
Net profit reached $59.7 billion, marking a 126 percent year-over-year increase. However, this result included gains of approximately $7.8 billion from the company's portfolio of investments in artificial intelligence companies.
Nvidia told investors it expects revenue of around $108 billion in the current quarter, plus or minus two percent, a level that exceeds Wall Street's estimates of around $104.19 billion, according to data compiled by the London Stock Exchange Group, and reflects management's conviction that spending on artificial intelligence will not slow down anytime soon.
The company also predicted revenue growth of about 70 percent during its next fiscal year, which begins in January, explaining that sales are affected by supply constraints, not weak demand.
Nvidia said its forecast did not assume any data center chip sales from China.
Infrastructure investments are approaching $1 trillion.
Nvidia's biggest customers – Amazon, Microsoft, Google's parent company Alphabet, and Meta – are expected to spend nearly $800 billion on data centers and artificial intelligence infrastructure this year.
This figure represents roughly double last year's spending, while analysts expect total sector spending to exceed the $1 trillion mark.
With this exceptional influx of funds, Nvidia has strengthened its role in funding the expansion of the artificial intelligence sector through investments in startups, which has raised increasing questions about what is known as circular financing, as the company invests in emerging customers who may use those funds to purchase its products.
The company's chief financial officer, Colette Criss, addressed these criticisms during the earnings call, saying: We recognize the scale of this support for those companies, and we know that some will describe it as circular financing, but we see it differently.
She added: We are undergoing a major transformation in computing platforms, building one of the most important technologies in human history, and these companies represent exceptional opportunities that only come around once in a generation.
For his part, Huang said his only regret was that he had not invested more and earlier.
China is outside sales forecasts
Nvidia reiterated its forecast that it will not generate revenue from sales of AI-powered computing chips in China in the coming period.
Beijing has recently begun allowing limited quantities of Nvidia's H200 processors into the country. Reports indicate that ByteDance and Tencent each received approximately 10,000 units in recent weeks, a number that represents only a fraction of the quantities permitted under US export licenses.
Despite the surge in the stock following the results, Nvidia's stock price growth in recent months has remained below that of other chip companies, and it does not compare to the significant gains the stock made in 2023 following the launch of the ChatGBT application.
This rise had propelled the California-based company to the top of the world's most valuable publicly traded companies, a position it still holds ahead of iPhone maker Apple.
