Nvidia CEO Jensen Huang
Credit: Reuters Photo
San Francisco: Nvidia, which dominates the market for computer chips used to build artificial intelligence, has become a Wall Street sensation. But Nvidia’s success has raised questions about how long its run can last.
On Wednesday, Nvidia showed that the world’s seemingly insatiable appetite for AI technology could lift its business to new highs. The company, a bellwether for AI, topped Wall Street’s expectations for the quarter, reporting that revenue jumped 94 per cent from a year earlier and that profit increased 106 per cent during the three months that ended in October.
Nvidia also projected that revenue in the current quarter would rise 70 per cent from a year ago to $37.5 billion, as it began selling a more powerful AI chip called Blackwell. The forecast exceeded Wall Street’s prediction by about $500 million and suggested that customers were lining up to buy the new chip.
Revenue in the last quarter was $35.08 billion, surpassing the company’s estimate of $32.5 billion in August. Net income rose to $19.04 billion from $9.24 billion a year earlier.
Shares in Nvidia fell 1 per cent in after-hours trading, partly because its sales outlook was dampened by supply constraints on its new chip. The company said it would take several quarters to produce as many Blackwell chips as its customers wanted.
“The challenge that we have is how fast can we get that supply, getting ready, into the market this quarter,” said Colette Kress, Nvidia’s finance chief, during a call with analysts. “We’ll be back on track with more suppliers as we turn the corner into the new calendar year. We’re just going to be tight for this quarter.”
The results are the latest proof that companies are continuing to pour billions of dollars into generative AI technology. Nvidia’s chips are being purchased to power chatbots, write software code and discover new drugs — even as some skeptics on Wall Street and in Silicon Valley question whether the financial return on those applications will justify their staggering costs.