Soaring demand for the chips needed to train the latest wave of generative artificial intelligence systems, such as ChatGPT, led Nvidia to issue a revenue forecast that far exceeded Wall Street expectations, sending its shares soaring in after-hours trading.
The U.S. chipmaker said on Wednesday it expected sales of $11 billion in the three months to the end of July, well above analysts’ forecast of $7.2 billion and confirming its role as the biggest short-term beneficiary of the AI race. status. Exploding in the tech industry.
The forecast has sent Nvidia shares up 20 percent, more than doubling since the start of the year and boosting its stock market value to $900 billion.
The upbeat forecast came as Nvidia reported revenue and earnings also topped estimates for the latest quarter ended April, thanks to a surge in sales to data center customers as demand for artificial intelligence grew.
Chief executive Jensen Huang said the sales growth reflected “two simultaneous shifts—accelerated computing and generative artificial intelligence.” He added that the company is “significantly increasing our supply to meet growing demand,” with an entire family of data center chips including this year’s new product, the H100, designed to meet demand for so-called large language models, such as OpenAI’s GPT-4.
In the most recent quarter, revenue reached $7.19 billion, up 19% from the previous three months but down 13% from the year-earlier period due to lower sales of gaming system chips.
Earnings per share rose 22% from a year earlier to 82 cents, and Wall Street’s consensus estimate for the company was $1.09. The Wall Street consensus is for revenue of $6.52 billion and an estimated EPS of 92 cents.