Breaking News
Investing Pro 0
Free Webinar - Master Indicators: Maximized Trading Potential! | Thursday, June 8 | 12:30PM EDT Enroll Now

Nvidia shares soar nearly 30% as sales forecast jumps and AI booms

Published May 24, 2023 04:24PM ET Updated May 24, 2023 07:18PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith
 
NVDA
-3.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TSLA
+1.47%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Chavi Mehta and Stephen Nellis

(Reuters) -Nvidia Corp on Wednesday forecast second-quarter revenue more than 50% above Wall Street estimates, and said it is boosting supply to meet surging demand for its artificial-intelligence chips, which are used to power ChatGPT and many similar services.

Shares of Nvidia (NASDAQ:NVDA), the world's most valuable listed semiconductor company, rocketed as much as 28% after the bell to trade at $391.50, a record high. The gain increased Nvidia's stock market value by about $200 billion to over $950 billion, extending the Silicon Valley company's lead as the world's most valuable chipmaker and Wall Street's fifth-most-valuable company.

Nvidia has strained to meet demand for its AI chips, with Tesla (NASDAQ:TSLA) Inc Chief Executive Officer Elon Musk, who is reportedly building out an artificial-intelligence startup, earlier this week telling an interviewer that the graphics processing units (GPUs) are "considerably harder to get than drugs."

But Nvidia Chief Executive Officer Jensen Huang told Reuters in an interview on Wednesday that the company had started full production of its latest AI chips in August last year, which gave it some buffer for supplies when chatbot apps exploded in popularity.

"In January, the new demand was incredibly steep," Huang said. "We had to place additional orders, and we procured substantially more supply for the second half" of 2023.

Nvidia forecast current-quarter revenue of $11 billion, plus or minus 2%. Analysts polled by Refinitiv had forecast revenue of $7.15 billion.

"Given the generative AI gold rush taking place, this should fuel demand for Nvidia's chips for the remainder of the year," said Edward Jones analyst Logan Purk.

Adjusted revenue for the quarter ended April 30 was $7.19 billion. Analysts polled by Refinitiv were expecting revenue of $6.52 billion. The company's data center chip sales hit $4.28 billion, beating analyst estimates of $3.89 billion, according to segment data from FactSet.

Nvidia faces competition in AI chips from traditional rivals like Advanced Micron (NASDAQ:MU) Devices Inc and Intel Corp (NASDAQ:INTC) , as well as from startups such as Cerebras Systems and the in-house AI chip efforts at companies like Alphabet (NASDAQ:GOOGL) Inc's Google and Amazon.com (NASDAQ:AMZN) .

But Huang said Nvidia has shifted toward selling entire AI supercomputing systems, rather than just chips, to large companies that want to own - and are willing to pay for Nvidia's prices and gross margins - AI expertise comparable to Silicon Valley's tech giants.

"No company can build a state-of-the-art AI datacenter without the technology and all the software of a (cloud computing provider), but we have all that capability," Huang said. "The enterprise is a very, very different market."

Gaming chip revenue beat Wall Street expectations at $2.24 billion versus estimates of $1.97 billion, according to FactSet data.

Net income rose to $2.04 billion, or 82 cents per share, from $1.62 billion, or 64 cents per share, a year earlier. Excluding items, the company earned $1.09 per share in the first quarter, beating estimates of 92 cents.

Nvidia shares soar nearly 30% as sales forecast jumps and AI booms
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email