Nvidia rides the AI boom

1 min read

Nvidia’s fourth-quarter earnings were truly remarkable as demand for its products surged.

The chipmaker saw revenues of $22.1bn in the fourth quarter, which was way ahead of analysts’ expectations. In fact, it was up 22 per cent on the third quarter but compared to a year ago was ahead by a massive 265 per cent.

The demand for AI is behind this dramatic growth and Jensen Huang, co-founder and chief executive officer of Nvidia, has said that accelerated computing and generative AI have now hit the tipping point, with demand surging worldwide across companies, industries and nations.

For many Nvidia, which dominates the AI market, is an industry bellwether. Companies like Microsoft, Meta and Google are big purchasers of its chips as they look to develop innovative new AI products and features.

And Nvidia isn’t standing still. It plans to ship a new chip, the B100, in 2024 and has just signed a new partnership agreement with Nokia to develop AI solutions that could improve telecommunications infrastructure.

Nvidia has continued to deliver strong financials and its earnings have beaten analyst expectations for the past four quarters. The company is now valued at over $1.5tn ahead of the likes of Google and Amazon.

Interestingly questions are being asked as to whether this can continue or whether this is just another boom that will end in a bust.

At present it will continue and there appears to be plenty of growth in the markets Nvidia addresses.

Nvidia is forecasting $24bn in revenue for the next quarter, putting it on track to nearly $100bn in sales over the coming year.

Confidence in the market is high and spending is likely to remain strong.