Nvidia, the artificial intelligence chip maker, was crowned the world’s first $4 trillion public company last month and has become perhaps the most important factor determining the direction of the stock market.
On Wednesday, the Silicon Valley company reported results that showed that spending on AI infrastructure remains robust, easing the anxieties of Wall Street and investors around the world.
Concerns over whether tech companies would continue shelling out billions to build AI data centres — spending that has helped prop up the economy — had mounted in recent months. But Nvidia’s sales rose 56 per cent to $46.74 billion in the three months that ended in July, just topping Wall Street’s expectations. Profit increased more than 59 per cent to $26.42 billion.
Revenue in the current quarter is projected to rise 54 per cent from a year ago to $54 billion, as tech companies pour money into data centres. The forecast was in line with Wall Street’s prediction for $53.9 billion, but the company said its estimates did not include any sales for China, which would lift its revenue higher.
“The last year, AI has made tremendous progress,” Jensen Huang, Nvidia’s chief executive, said during a call with analysts. He said the company’s chips would benefit as spending on AI infrastructure increased to $3 trillion to $4 trillion by the end of the decade. “We’re in the beginning of this build-out,” he said.
Nvidia’s results have been closely watched since OpenAI released its ChatGPT chatbot in late 2022, igniting an AI boom. The company’s fortunes have soared as tech companies have flocked to buy its chips, which are ideal for powering the development of AI.
Nvidia has grown into the market’s most significant stock, accounting for 7.5 per cent of every dollar in the S&P 500, up from 3 per cent in December. Its results also influence the values of tech and energy companies with AI businesses.
In recent months, demand for Nvidia’s newest chip, the Blackwell, has been especially scrutinised with the company distributing about 72,000 Blackwell chips a week for an estimated price of $30,000 each.
New York TImes News Service
