Nvidia Corp., the chipmaker at the center of the artificial intelligence boom, gave another upbeat sales forecast, showing that spending on artificial intelligence computing remains strong.
Second-quarter revenue will be about $28 billion, the company said Wednesday. Analysts on average had forecast $26.8 billion, according to Bloomberg. Results for the first fiscal quarter, which ran through April, also exceeded forecasts.
“The next industrial revolution has begun,” CEO Jensen Huang said in a statement, echoing one of his favorite themes. “AI will bring significant productivity gains to virtually every industry and help companies become leaner and more energy efficient while expanding revenue opportunities.”
The optimistic forecast solidifies Nvidia’s status as the biggest beneficiary of AI spending. The company’s so-called artificial intelligence accelerators – chips that help data centers develop chatbots and other advanced tools – have become a hot commodity over the past two years, driving sales soaring. Nvidia’s market value also soared, topping $2.3 trillion.
Shares rose about 4% in extended trading Wednesday. This year’s close was already up 92%, boosted by investors’ hopes that the company would continue to underperform.
The Santa Clara, California-based company also announced a 10-for-1 stock split and increased its quarterly dividend by 150% to 10 cents per share.
Nvidia, which Huang co-founded in 1993, began as a supplier of graphics cards for PC gamers. His recognition that the company’s chips were well suited for developing artificial intelligence software helped open up a new market and gave him an edge over his competitors.
The release of OpenAI’s ChatGPT in 2022 has sparked a race among major tech companies to build their own artificial intelligence infrastructure. This fight has made Nvidia H100 accelerators a must-have product. They sell for tens of thousands of dollars per chip and are often in short supply.
But most of that new revenue came from a small handful of customers. A group of four companies – Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and Google Alphabet Inc. — are Nvidia’s largest customers and account for about 40% of sales. Huang, 61, is trying to expand his reach by producing complete computers, software and services aimed at helping more corporations and government agencies deploy their own artificial intelligence systems.
In the first quarter of the fiscal year, Nvidia’s revenue more than tripled to $26 billion. Excluding certain items, earnings were $6.12 per share. Analysts had forecast sales of about $24.7 billion and earnings of $5.65 per share.
Nvidia’s data center division, now its biggest source of sales, generated $22.6 billion in revenue. Gaming chips contributed $2.6 billion. Analysts set targets of $21 billion for the data center division and $2.6 billion for gaming.
Nvidia stressed on Wednesday that it wants to sell its technology to a broader market, going beyond the giant cloud computing providers known as hyperscalers. Huang said AI is moving into consumer internet companies, automakers and healthcare clients. Countries are also developing their own systems, a trend called sovereign AI.
These opportunities are “creating many multibillion-dollar vertical markets” beyond cloud providers, he said.
However, hyperscalers remained the most important growth driver for Nvidia last quarter. They generated approximately 45% of the company’s data center revenues. This suggests that Nvidia is in the early stages of diversifying its business.
The company’s new chip platform, called Blackwell, is now in full production, Huang said. And this lays the foundation for generative artificial intelligence capable of processing trillions of parameters. “We are ready for the next wave of growth,” he said.