Artificial intelligence chipmaker Nvidia on Wednesday announced another quarter of astounding quarterly growth as investors try to decipher whether technology’s latest craze is overblown hyperbole or a springboard into a new era of prosperity and productivity.
The results for the November-January period blew past the analyst projections that shape investors’ perceptions, as has been the case since Nvidia’s high-end chips emerged as AI’s best building
blocks three years ago.
Nvidia’s fiscal fourth-quarter surged 73% from the previous year to $68.1 billion while its profit nearly doubled to roughly $43 billion, or $1.76 per share.
The Santa Clara, California, company also provided a forecast exceeding analyst projections while its CEO Jensen Huang reinforced the demand for the company's chips is still “skyrocketing." That description feeds into Huang's thesis that the AI boom is still in the early stages of a buildout that will reshape society. If Nvidia hits its revenue target for the February-April period, it will translate into a 77% increase from last year — a sign that the company's already phenomenal growth rate is still accelerating.
Nvidia’s stock price rose by more than 2% in extended trading after the report came out.
The chipmaker has regularly cleared the bar set by analysts in the past three years, often by a wide margin, but that hasn’t always been enough to satisfy investors who have become increasingly skeptical about whether AI will live up to all the hype surrounding the technology.
After Nvidia delivered a stellar performance that far exceeded analyst forecasts in its last quarterly report, its stock price still fell by 3% during the next day’s trading.
The AI fervor has escalated again during the past month as the four companies leading the AI charge — Amazon, Microsoft, Google parent Alphabet and Facebook parent Meta Platforms — collectively made commitments to spend about $650 billion this year ramping up their AI computing power.
A significant amount of the money is expected to be earmarked to buy more Nvidia chips required to power their AI factories, just as has been the case for much of the past three years — as Nvidia's annual revenue soared from $27 billion to $216 billion. Analysts expect the chipmaker's revenue to surpass $330 billion during the company's next fiscal year.
“Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth,” Huang said.
