Nvidia shares spiked on Wednesday after the company reported strong quarterly earnings and provided a revenue forecast for its current October quarter that was well above expectations. The company’s CEO credited a dramatic shift toward AI adoption for the robust results.
Nvidia (ticker: NVDA) said adjusted earnings for the July quarter were $2.70 per share, compared with Wall Street’s consensus estimate of $2.08, according to FactSet. Revenue came in at $13.5 billion—up 101% year-over-year, which was better than analysts’ expectations of $11.2 billion.
The big news was the outlook. For the current quarter, Nvidia provided a revenue forecast range with a midpoint of $16 billion, above the analyst consensus of $12.6 billion.
“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” Nvidia CEO Jensen Huang said in the release. “The race is on to adopt generative AI.”
Nvidia shares were up 7% in late trading shortly after the report.
The chip maker’s data center revenue surged in the July quarter to $10.32 billion—up 141% from the prior quarter and up 171% from the prior year. Nvidia said data center sales were driven by demand from cloud service providers and large consumer internet companies.
Nvidia dominates the market for chips used for AI projects, and it has been the primary beneficiary of the generative AI trend. OpenAI unleashed a wave of excitement about the technology after releasing its ChatGPT chatbot late last year.
Start-ups and corporations prefer Nvidia’s chips because of its robust software programming platform ecosystem, known as CUDA. Developers have been building and sharing AI-related tools and software libraries for over a decade on Nvidia’s proprietary platform, making it easier to build AI applications rapidly.
In a phone interview with Barron’s after the earnings report was released, Chief Financial Officer Colette Kress said Nvidia expects to increase product supply each quarter through the next fiscal year.
Nvidia is also adding additional vendors and suppliers to help add capacity for advanced chip packaging and memory, she said. In terms of order allocation, the executive said the two primary factors are the timing of the order and the requested timeline for delivery by the customer.
Heading into Wednesday’s earnings report, Nvidia stock was up about 220% so far this year.
Write to Tae Kim at [email protected]
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