NVIDIA's quarterly earnings defy AI bubble fears
What's the story
NVIDIA, the world's most valuable publicly-traded company, has reported a record annual revenue of $215.9 billion. The figure comes despite investor skepticism over the huge investments in artificial intelligence (AI) technology. The company's sales for the last three months of its financial year also saw a massive jump of 73% compared to last year, beating analysts' forecasts.
Market expansion
CEO Jensen Huang on computing demand
NVIDIA's CEO Jensen Huang emphasized the rapid growth in computing demand, saying "Computing demand is growing exponentially." He added that their customers are rushing to invest in AI compute, which he described as "the factories powering the AI industrial revolution and their future growth." This statement underlines NVIDIA's central role in building AI infrastructure by providing advanced chips to top AI model developers like OpenAI and Meta.
Strategic moves
Concerns over 'circular financing' deals
NVIDIA is also looking to create demand with new technologies. The company has been criticized by investors for its growing network of deals with other companies, raising concerns over "circular financing" deals. These are investments by NVIDIA in other companies that could be obscuring the true strength of AI demand. On the geopolitical front, NVIDIA is caught in a tug-of-war between the US and China.
Product development
Expansion into self-driving cars and robotaxis
NVIDIA is also expanding its product line to have more involvement in physical products with AI. At the CES technology trade show in Las Vegas, Huang unveiled a new tech platform for self-driving cars. The company also announced plans to launch a robotaxi service by next year with an unnamed partner. These moves highlight NVIDIA's commitment to exploring new avenues of growth in the AI space.
Financial outlook
Data center division drives growth
NVIDIA's data center division, which sells high-powered chips for training and running AI models, was once again the growth engine. Revenue from that segment hit a record $62.3 billion in the quarter, up 75% from last year and 22% from the previous quarter. For the current quarter, NVIDIA has projected revenue at $78 billion, plus or minus two percent, well above Wall Street's expectation of around $72 billion.