Prince of AI Nvidia has just revealed a blow-out quarter, with earnings and revenue both dramatically exceeding expectations. The tech giant’s profits skyrocketed by 59%, reaching a net income of $26.42 billion. Earnings per diluted share soared to $1.05, a sizeable increase from just 67 cents per share in the same quarter last year. Such remarkable growth is a testament to the insatiable demand for Nvidia’s products. Its data center division, in particular, has quickly proven essential for powering artificial intelligence infrastructure.
On the earnings call, Nvidia not only beat forecasts this quarter, but projected 50%+ sales growth for the next quarter. The company’s total revenue jumped 56% year-over-year. It hit a record $41.1 billion, thanks largely to surging data center business due to very strong demand for cloud infrastructure. That latter distinction is important because the largest cloud providers account for roughly 50% of Nvidia’s data center revenue. Perhaps most clearly, this illustrates its absolutely central role in the tech ecosystem.
Nvidia’s new “Hano” product line has fueled their success, bringing in a staggering $27 billion in sales. This line item represents more than 70% of the revenue from the data center industry. The company remains entrenched in the buildout of infrastructure necessary for artificial intelligence applications, positioning itself as a leader in this evolving market.
Nvidia’s quarter results were incredible. Though the company had an H2O chip hit, as they were never marketed to China. The company announced that the returned inventory led to the release of $180 million worth of H20 inventory to a non-Chinese customer. Earlier this week, Nvidia announced that the H20 chip was responsible for $4.5 billion in write-downs. Had it been on sale in the second quarter, it would have increased revenue by as much as $8 billion more.
To bolster shareholder value, Nvidia’s board has approved an additional $60 billion in share repurchases with no expiration date specified. This strategic move not only aligns with the company’s recent growth trajectory, but signals the firm’s ongoing fortune telling success.
Opportunities abound Nvidia is gaze into the future with unbridled optimism. They plan to obtain U.S. licenses to export the H20 chip to China, which would greatly expand their revenue opportunity. The Richmond, VA-based company is exceptionally well-positioned to ride the current wave of disruptive market dynamics. It’s dedicated to playing to its strengths with data center technology and artificial intelligence.