Nvidia beat Wall Street estimates on Wednesday as profits soared, buoyed by the chipmaking dominance that has made the company an icon of the artificial intelligence boom.
Net income rose more than sevenfold from a year earlier, rising to $14.88 billion in the first quarter ended April 28, up from $2.04 billion a year earlier. Turnover more than tripled, from $7.19 billion last year to $26.04 billion.
“The next industrial revolution has begun,” CEO Jensen Huang said during a conference call with analysts. Huang predicted that the companies that buy Nvidia chips will use them to build a new type of data centers that he called “AI factories,” designed to produce “a new product: artificial intelligence.”
Huang added that training AI models will become a faster process as they learn to become “multimodal” – that is, able to understand text, speech, images, video and 3D data – and also “learn to reason and plan’.
The company reported earnings per share, adjusted to exclude one-time items, of $6.12, well above the $5.60 that Wall Street analysts had expected, according to FactSet. It also announced a 10-for-1 stock split, a move the company noted will make its shares more accessible to employees and investors.
In addition, it increased its dividend from 4 cents to 10 cents per share. Nvidia Corp. shares rose 6% to $1,006.89 in after-hours trading. The stock has risen more than 200% in the past year.
The company, based in Santa Clara, California, had gained an early lead in the hardware and software needed to tailor its technology to AI applications, in part because founder and CEO Jensen Huang began pushing the company into what was then was seen as a silent half. -baked technology more than ten years ago. It also makes chips for gaming and cars.
The company now has the third highest market value on Wall Street, behind only Microsoft and Apple.
“Nvidia is once again defying gravity,” said Jacob Bourne, analyst at Emarketer, about the quarterly report. While many tech companies are eager to reduce their dependence on Nvidia, which has achieved a level of hardware dominance in AI that rivals that of previous computing pioneers such as Intel Corp., “they’re not quite there yet,” he added.
Demand for generative AI systems that can assemble documents, create images and serve as increasingly lifelike personal assistants has fueled astronomical sales of Nvidia’s specialized AI chips over the past year. Tech giants Amazon, Google, Meta and Microsoft have all indicated that they will have to spend more in the coming months on the chips and data centers needed to train and operate their AI systems.
David Hamilton of the Associated Press contributed to this report.
David Hamilton
