NVIDIA revenue jumps 62% on strong AI chip demand
What's the story
NVIDIA, the world's most valuable company, has exceeded Wall Street's expectations for both revenue and future sales. The company's quarterly earnings report revealed a 62% increase in revenue to $57 billion for the three months ending in October. This growth was largely driven by demand for its chips used in artificial intelligence (AI) data centers.
Division performance
AI data center division sees significant sales growth
NVIDIA's AI data center division saw a whopping 66% jump in sales, exceeding $51 billion. The company's fourth-quarter sales forecast of around $65 billion also beat estimates, pushing NVIDIA's shares up by some 4% in after-hours trading. This performance has eased investor concerns over heavy AI spending that had previously unsettled markets.
Market response
NVIDIA's CEO highlights robust demand for AI products
NVIDIA's CEO Jensen Huang said in a statement that sales of its AI Blackwell systems were "off the charts." He also noted that "cloud GPUs are sold out." Huang addressed concerns over an 'AI bubble,' saying, "From our vantage point, we see something very different. We excel at every phase of AI."
Forward outlook
Future prospects and regulatory challenges
Huang previously said he expected $500 billion in AI chip orders through next year. Investors were keen to know when these revenues would materialize and how the company plans to meet these orders. Colette Kress, NVIDIA's CFO, said the company would "probably" take more orders on top of the already announced $500 billion. However, she expressed disappointment over regulatory restrictions limiting their ability to export chips to China.
Expansion plans
Data center complex in Saudi Arabia
At the US-Saudi Investment Forum in Washington, Huang announced a massive data center complex in Saudi Arabia. Elon Musk's AI company, xAI, will be its first customer. The facility will be equipped with hundreds of thousands of NVIDIA chips. This comes as tech giants ramp up their spending on AI to capitalize on a boom that has pushed stocks to record highs.