NVIDIA shares: AI chip maker storms to another new record high
Second quarter earnings at AI chipmaker NVIDIA beat all estimates and the outlook also broke even the most bullish forecasts.
It reported an 88% jump in revenue with its performance driven by its data centre business, which includes the A100 and H100 AI chips that are needed to build and run AI applications like ChatGPT. Data centre revenue came in at $10.32 billion, up 171% on an annual basis. Analysts are now looking for sales to grow 170% in the current quarter.
(Video Transcript)
NVIDIA
Now after the market closed on Wednesday, NVIDIA stole all the headlines for all the right reasons. It reported an 88% jump in revenue and topping its earnings estimates. As a result, the second quarter was driven by demand for artificial intelligence chips. AI is the word around NVIDIA and oh boy, it laid it out in spade falls. NVIDIA's performance was driven by its data center business, which includes the A100 and H100 AI chips that are needed to build and run AI applications like Chat GPT.
Share price chart
I think we've got a chart here showing you what happened. NVIDIA reported $10.3 billion in data center revenue, which was up 171% on an annualized basis. Earnings per share, you can see they're blowing the doors off. We were looking for around $2.09. We've got $2.70 earnings per share, revenues coming through, smashing estimates as well of $11.25 billion, $13.5 billion of revenue. That wasn't all either. As the business said, its expected third quarter revenue of around about $16 billion, higher than the pre-$12.6 billion forecast by Refinitiv.
NVIDIA sales
Analysts say this suggests that its sales will grow 170% on an annualized basis in the current third quarter alone. Now I want to show you what happened, all sessions on the stock late last night. NVIDIA had already been up 267%, or in fact to the highest after the reported numbers last night, 267% so far this year alone. You can see in fact it was lower than that beginning in October last year, so even adding more since October last year. Now I've drawn this box here on the right-hand side just to show you what happened, with the stock up a total of 13.22%. It closed all sessions on the IT platform off the highs, but nonetheless up 9.6%.
NASDAQ
The volumes here were enormous, and NVIDIA rising to that record high, and it absolutely will steer the direction of travel at the start of today's trade on these markets when things get underway on Wall Street later on, and it will definitely give a boost to the NASDAQ on which it trades. And it's helped a lot of other stocks as well in the artificial intelligence area.
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