Nvidia CEO Jensen Huang Sees No Sign of Booming A.I. Chip Business Slowing
Nvidia's stock price topped $1,000 for the first time after its fiscal first-quarter earnings release.
Nvidia (NVDA) CEO Jensen Huang " width="970" height="688" data-caption='Nvidia CEO Jensen Huang delivers a keynote address during the Nvidia GTC Artificial Intelligence Conference at SAP Center on March 18, 2024 in San Jose, California. <span class="lazyload media-credit">Justin Sullivan/Getty Images</span>'>
A.I. chipmaker Nvidia’s share price topped $1,000 for the first time after it reported estimate-beating financial result for the fiscal quarter ended April 30 yesterday (May 22), signaling continuing momentum CEO Jensen Huang attributed to accelerating demand for A.I. processors. “Beyond cloud service providers, generative A.I. has expanded to consumer internet companies, and enterprise, sovereign A.I., automotive and healthcare customers, creating multiple multibillion-dollar vertical markets,” Huang said in a statement. He anticipates much of the revenue to come this year will be attributed to its next-generation A.I. graphics processing unit (GPU), Blackwell, which is in full production.
The Santa Clara, Calif.-based company’s earnings reports have become a way for investors to gauge the strength of the A.I. boom that has overtaken markets in recent months. Nvidia’s first-quarter profit and revenue rose by 628 percent and 268 percent, respectively, compared to the same period last year. It was Nvidia’s most profitable and highest sales quarter ever. “People want to deploy these data centers right now,” Huang said in an interview with Yahoo Finance yesterday. “They want to put our [graphics processing units] to work right now and start making money and start saving money. And so that demand is just so strong.”
Read Also: Everything to Know About Nvidia’s New Blackwell A.I. Chips Unveiled By Jensen Huang
Tech giants have said that they will spend a collective $200 billion on resources, including semiconductors and data centers, needed to power A.I. services. This spending has been a growth catalyst for Nvidia, now the third most valuable public company in the U.S. after Microsoft and Apple, at $2.4 trillion.
Nvidia’s data center revenue climbed 427 percent year over year to $22.6 billion, comprising 86 percent of the company’s total revenue for the three-month period. Wall Street has previously raised concerns about the share of Nvidia’s data center revenue driven by hyperscalers like Google, Microsoft and Amazon, especially as the tech giants roll out their own AI accelerator chips. Even still, Nvidia’s finance chief Colette Kress said in a statement that large cloud providers accounted for less than half (around 45 percent) of the company’s data center revenue. A big push for Nvidia’s chip business in the past quarter was Meta’s announcement of Llama 3, its latest large language model, which uses 24,000 of Nvidia’s H100 GPUs. Huang mentioned that demand for both Hopper and Blackwell platforms will outstrip supply well into 2025, with the complexity of the products challenging Nvidia’s efforts to keep pace.
Nvidia also announced it will conduct a 10-for-1 stock split on June 7, which will trim its share price from about $950 to $95. This enables investors and employees to purchase whole shares more affordably. A stock split doesn’t change a company’s market cap or any of its business fundamentals, but conventional wisdom goes that the event makes a company’s stock rise, because it makes a stock more accessible to average investors.