Jensen Huang, co-founder and CEO of Nvidia Corp, during the Nvidia GPU Technology Conference (GTC) in San Jose, California, US, on Tuesday, March 19, 2024.
David Paul Morris | Bloomberg | Getty Images
Nvidia Shares topped $1,000 for the first time in extended trading on Wednesday after the chipmaker reported fiscal first-quarter results that beat analysts' estimates.
Nvidia's quarterly earnings report has become a way for investors to gauge the strength of the artificial intelligence boom that has stunned markets in recent months. Its strong results on Wednesday suggest that demand for AI chips made by Nvidia remains strong, and CEO Jensen Huang said the company will see revenue from its next-generation AI chip, called Blackwell, later this year.
The stock rose 7% in extended trading. Nvidia also said it would split its stock 10-to-1. Based on post-market action, shares are poised to hit a new high on Thursday.
Earnings per share: $6.12 adjusted versus $5.59 adjusted, according to LSEG consensus estimates. Revenue: $26.04 billion vs. $24.65 billion expected from LSEG
Nvidia said it expects sales of $28 billion in the current quarter. Wall Street had expected earnings per share of $5.95 on sales of $26.61 billion, according to LSEG.
The chipmaker reported net income for the quarter ending April 28 of $14.88 billion, or $5.98 per share, compared to $2.04 billion, or 82 cents, in the same period a year earlier.
Last year, Nvidia's sales rose significantly as companies such as Google, Microsoft, dead, Amazon OpenAI buys billions of dollars worth of graphics processing units from Nvidia, which are advanced and expensive chips needed to develop and deploy AI applications.
The company's largest and most important business is sales of its data centers, which include its AI chips as well as many of the additional parts needed to run large AI servers.
Nvidia said its data center category rose 427% from the same quarter last year to $22.6 billion in revenue. This is due to shipments of the company's Hopper GPUs, which include the company's H100 GPU, Nvidia CFO Colette Kress said in a statement.
“One of the highlights of the quarter was Meta’s announcement of Lama 3, its latest large language model using 24,000 H100 GPUs,” Chris said on a call with analysts. Large cloud providers make up about the “mid-40%” of Nvidia's data center revenue, she added.
Even as the company announced a tripling or more of its business, Huang said the company's next generation of AI-powered GPUs, called Blackwell, will lead to further growth.
“We're going to see a lot of Blackwell revenue this year,” the CEO said on a call with analysts, adding that the new chip will be in data centers by the fourth quarter.
Nvidia also highlighted strong sales of its networking parts, which are increasingly important as companies build clusters of tens of thousands of chips that need to communicate. Nvidia said its networking revenue was $3.2 billion, mainly for InfiniBand products, which was three times higher than sales in the same period a year earlier.
Nvidia, before becoming a major supplier to major AI companies, was primarily known as a 3D gaming hardware maker. Gaming revenue rose 18% during the quarter to $2.65 billion, which Nvidia attributed to strong demand.
The company also sells chips for cars and chips for advanced graphics workstations, which remains much smaller than its data center business. It recorded $427 million in professional visualization sales, and $329 million in vehicle sales.
Nvidia said it bought back $7.7 billion worth of its stock and paid a $98 million dividend during the quarter. Nvidia also said it is increasing its quarterly cash dividend from 4 cents per share to 10 cents on a pre-split basis. After the split, dividends will be one penny per share.
