Nvidia's revenue soars 122% amid AI demand surge

Nvidia reported a 122 per cent surge in revenue, driven by skyrocketing demand for its data centre chips, particularly those powering artificial intelligence (AI) applications. The company's earnings, announced after the market closed, exceeded Wall Street expectations and included a robust forecast for the upcoming quarter, as detailed in a report by CNBC.

For the quarter, Nvidia reported earnings per share of 68 cents, surpassing the expected 64 cents, and revenue of $30.04 billion, also beating the anticipated $28.7 billion. Nvidia projects $32.5 billion in revenue for the current quarter, up from $31.7 billion expected by analysts. This marks an 80 per cent increase from the previous year.

Nvidia stock reacts negatively despite robust forecast

Nvidia has been a major beneficiary of the ongoing AI boom, with its market value soaring. Despite this, the stock fell 8 per cent in after-hours trading but remains up approximately 150 per cent year to-date. The company's net income more than doubled, reaching $16.6 billion, up from $6.18 billion in the same quarter last year.

The data centre segment, which includes AI processors, was the standout performer, with revenue jumping 154 per cent year-over-year to $26.3 billion, accounting for 88 per cent of Nvidia's total sales. This figure exceeded StreetAccount's expectations of $25.24 billion.

However, not all the revenue came from AI chips, $3.7 billion was generated by Nvidia's networking products. Nvidia's CEO, Jensen Huang, highlighted the strong demand for the current-generation Hopper chip while noting the high anticipation for the upcoming Blackwell AI chip.

"Hopper demand remains strong, and the anticipation for Blackwell is incredible," Huang said. Nvidia's gaming revenue, once the company's primary focus, grew 16 per cent to $2.9 billion, driven by increased sales of PC gaming cards and console system-on-chips (SOCs). Additionally, the company's professional visualization business and automotive/robotics segments also saw growth, reporting revenues of $454 million and $346 million, respectively. Further, in a significant move, Nvidia announced a $50 billion share buyback, signalling confidence in its continued growth amid the AI boom.