Nvidia maintains its rapid growth rate. The American chip provider once again exceeded expectations with its business results presented on Wednesday after the stock market closed. He more than tripled his sales in the last quarter and even increased his net profit more than eightfold. He also predicted a huge jump in sales for the current quarter.
Nvidia's share price was up more than 8 percent at times in after-hours trading. It has more than tripled in the past twelve months and has risen by a further 40 percent since the beginning of the year alone. Last May, the company became the first chip provider in history to exceed the $1 trillion mark with its market capitalization. A few days ago, it even overtook the online retailer Amazon and the Alphabet holding company around the Internet company Google in terms of market value, making it the third most valuable American company, behind Microsoft and Apple. At the moment, Nvidia's market value is almost $1.7 trillion.
Nvidia owes the good development to its previously dominant position in the chip business that is used for applications related to artificial intelligence. The group is benefiting from the current gold rush mood in this area because its powerful semiconductors, which can carry out calculation steps in parallel, are well suited for such complex tasks. Although competitors such as Advanced Micro Devices are trying to improve their position in the segment, Nvidia's leadership position remains unchallenged.
Sales expected to reach $24 billion in the first quarter
CEO Jensen Huang now said in a statement: “Demand is increasing sharply across companies, industries and countries.” Overall, Nvidia reported sales of $22.1 billion for the past quarter. Analysts had expected an average of $20.6 billion, compared to $6.1 billion a year ago. Net profit rose from $1.4 billion to $12.3 billion. Earnings per share of $5.16 were 52 cents better than expected.
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Nvidia is forecasting sales of $24.0 billion for the first quarter of the new fiscal year. That would again be a big jump compared to the previous year's value of $7.2 billion. Jensen apparently sees his company on a growth path for the foreseeable future. In a conference call, he said: “The fundamental conditions for further growth are excellent, for 2024, 2025 and beyond.” Chips are currently seen as a major bottleneck in the development of AI applications. Nvidia Chief Financial Officer Colette Kress said demand for the company's most powerful chips “far exceeds supply.” Mark Zuckerberg, CEO of the Internet company Meta, recently emphasized how great the demand is. He said his company will “massively” expand its computer infrastructure for developing AI models and will have 350,000 chip systems from Nvidia's H100 series by the end of the year. This corresponds to billions of dollars in investment, as these chips can cost up to $40,000.
In connection with the shortage of semiconductors, there is also a spectacular chip project that, according to media reports, is currently being pushed forward by Sam Altman. The CEO of Open AI, the developer of the AI system ChatGPT, reportedly wants to forge a global alliance to build dozens of chip factories. Investments amounting to trillions are said to be under discussion.
Nvidia's rapid growth is all the more remarkable because, according to the company, sales in the important Chinese market have shrunk “significantly”. This has to do with new export restrictions from the American government, which mean that Nvidia is no longer allowed to sell some of its most powerful chips in China and some other markets. This is a noticeable loss because, according to Nvidia, these countries recently accounted for 20 to 25 percent of sales in the AI chip division. But apparently this is more than compensated for by other regions of the world.
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