PROFITS SOAR FOR NVIDIA AS AI BOOM CONTINUES

Thu 23 May 2024:

Nvidia, the leading chipmaker driving the artificial intelligence (AI) boom, has reported a staggering seven-fold increase in profit, pushing its stock to a record high.

The Santa Clara, California-based company announced on Wednesday that its net income soared to $14.88 billion in the first quarter, up from $2.04 billion the previous year. Revenue also more than tripled to $26.04 billion, surpassing analysts’ expectations.

Nvidia forecasted that revenue would reach $28 billion, plus or minus 2 percent, in the second quarter, again exceeding analysts’ predictions. The company also revealed plans for a 10-for-1 stock split effective June 7, aimed at making its shares more accessible, and announced a 150 percent increase in its quarterly dividend to 1 cent per share. Stock splits increase the number of shares available without changing the company’s market capitalization, thus making each share more affordable for investors.

“The next industrial revolution has begun,” Nvidia chief executive Jensen Huang said in a conference call with analysts.

“Companies and countries are partnering with Nvidia to shift the trillion-dollar traditional data centres to accelerated computing and build a new type of data centre – AI factories – to produce a new commodity: artificial intelligence.”

Huang said he expected demand for Nvidia chips to outstrip supply for the foreseeable future, with the company “racing every single day” to keep up with orders.

Nvidia’s shares, which have risen over 90 percent this year, jumped 5.9 percent to exceed the $1,000 mark. The company has experienced soaring demand for its graphics processing units over the past year as tech giants like Google, Meta, OpenAI, and Amazon compete to dominate in AI.

In March, Nvidia surpassed Saudi Aramco to become the world’s third-most valuable company after Apple and Microsoft, with a market value exceeding $2.1 trillion.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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