- Smashes Q1 earnings and revenue forecasts
- Ups Q2 guidance by more than 50%
- Demand for artificial intelligence tech has exploded
Shares in microchips technology firm Nvidia (NVDA:NASDAQ) exploded overnight after blasting past first quarter (Q1) expectations and hiking Q2 guidance by more than 50%.
An explosion of artificial intelligence (AI)-powered technology saw Nvidia’s share price jump 23% in after-hours trading, piling an extra $175 billion onto the company’s market valuation and setting the stock up for a new all-time high of nearly $375.
HOW BIG WAS THE Q1 BEAT?
Nvidia announced earnings per share (EPS) of $1.09 for the three months to 30 April 2023 on revenue of $7.19 billion. Analysts polled by Investing.com anticipated EPS of $0.92 on revenue of $6.52 billion, implying beats of 18% and 10% respectively.
Q1 revenue in the Santa Clara-based firm’s data centre business hit a record $4.28 billion, up 14% from a year ago and 18% higher versus the previous quarter. That helped offset weakness in its gaming business, where revenue dropped 38% to $2.24 billion from a year ago.
AI THE HERO OF THE HOUR
Demand for AI everything is surging thanks to the launch of OpenAI’s ChapGPT and other chatbot technologies. Shares explains some of the everyday use cases in today’s (25 May) feature (subscribe here), and Nvidia could not resist the temptation to fuel the market’s excitement.
‘A trillion dollars of installed global data centre infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process,’ the company said.
‘Our entire data centre family of products is in production. We are significantly increasing our supply to meet surging demand for them,’ it added.
BONKERS GUIDANCE HIKE
Nvidia flagged an AI ‘inflection point’ back in February 2023, setting up for broad adoption reaching into every industry. ‘From start-ups to major enterprises, we are seeing accelerated interest in the versatility and capabilities of generative AI,’ Nvidia chief executive Jensen Huang said at the time.
Yet even Huang must be stunned by how fast companies are jumping on the technology industry’s next big thing. This is evident from the firm’s Q2 guidance hike of more than 50%. Nvidia said it anticipated Q2 revenue of around $11 billion, ‘plus or minus 2%.’
Consensus had been pitched at $7.13 billion.
