Soaring AI chip demand triples Nvidia revenue

Nvidia observes 206pc rise in year-on-year growth in revenue
A view of a Nvidia logo at their headquarters in Taipei, Taiwan May 31, 2023. — Reuters
A view of a Nvidia logo at their headquarters in Taipei, Taiwan May 31, 2023. — Reuters

The shares of the leading GPU manufacturer, Nvidia, dipped by 1% on Tuesday after the chipmaker released the results for -a quarter of the fiscal year, exceeding the expectations of Wall Street.

However, the company braces for a negative impact in the next quarter due to restrictions imposed on export which is obstructing its sales in China and other countries.

"We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions," stated Nvidia's finance chief, Colette Kress, in a letter to shareholders.

During a conference call with analysts, Kress mentioned that Nvidia is actively in talks with clients in the Middle East and China to secure U.S. government licenses for the sales of high-performance products.

However, Kress expressed uncertainty about their significance in the fiscal fourth quarter.

During the quarter ending Oct. 29, Nvidia observed a 206pc rise in year-on-year growth in revenue, reaching $9.24 billion in net income, equivalent to $3.71 per share.

Notably, the data centre segment contributed significantly to this surge, generating $14.51 billion in revenue, a staggering 279pc rise that surpassed the StreetAccount consensus of $12.97 billion.

Nvidia revealed that half of this data centre revenue has come from cloud infrastructure providers like Amazon, with the rest coming from consumer internet entities and large corporations.

In a note addressed to clients on Monday, Raymond James analysts Srini Pajjuri and Jacob Silverman expressed confidence in Nvidia's future and recommended buying the company's stock.

Attributing it to the expanding adoption of Generation AI across various industry verticals, they underscored the constant imbalance between the demand and supply of GPU.