Nvidia Corp. reported impressive earnings for its most recent quarter, surpassing expectations as its stock value continues to rise due to the high demand for its graphics chips used in artificial intelligence. The company’s revenue has more than tripled compared to the same period last year.

In its fourth quarter of fiscal year, Nvidia announced a revenue of $22.1 billion, a significant increase from $6.05 billion.

The Santa Clara, California-based company made a profit of $12.29 billion, a significant increase from last year’s profit of $1.41 billion.

After accounting for exceptional occurrences, Nvidia’s earnings were $5.16 per share in the most recent quarter, surpassing the $4.59 per share estimate from analysts surveyed by FactSet Research. These analysts had predicted $20.4 billion in revenue for the company’s fiscal year-end period.

The specialized chips produced by the company are vital elements in driving various types of artificial intelligence, including the newest generative AI chatbots like ChatGPT and Google’s Gemini.

According to Nvidia’s founder and CEO Jensen Huang, there has been a significant increase in demand for accelerated computing and generative AI globally, across various companies, industries, and countries.

Nvidia gained an initial advantage in the necessary hardware and software to customize its technology for AI uses, partly due to Huang’s early push towards what was then considered an incomplete technology over ten years ago. The company also produces chips for gaming and automotive purposes.

Huang explored methods for optimizing Nvidia’s graphics processing units, typically used for gaming, to also be utilized in AI tasks. This would allow for their use in areas beyond their initial success in video games.

Insider Intelligence analyst Jacob Bourne stated that Nvidia’s impressive performance in the last quarter prompts consideration of how long it can sustain its success. While it currently holds a significant advantage in the expanding global market for AI chips, it cannot become complacent.

Bourne stated that Nvidia is currently dealing with various obstacles, such as the overall uncertainty in the economy, the efforts of major technology companies to create their own AI chips, and the emergence of new competitors. However, he believes that the company’s dominance in the market will remain strong in the near future.

Nvidia predicts that their revenue for this quarter will be around $24 billion. Analysts’ current forecast for Nvidia’s revenue in the February-April timeframe is $22.2 billion.

Nvidia heavily depends on Taiwan Semiconductor Manufacturing Company, the largest producer of computer chips, to manufacture the chips designed by Nvidia.

Last week, Taiwan’s Taiex benchmark index soared by 3%, reaching an all-time high. This was driven by a significant increase in TSMC’s stock value.

After Morgan Stanley analysts increased their price target for Nvidia’s stock to $750 from $603, they observed a rise in demand for AI chips.

After the market closed, Nvidia’s stocks increased by 7.5% to reach $726 per share.

Source: wral.com