Nvidia Corp’s forecast for surging revenue surprised even the most bullish analysts on Wall Street, propelling the chipmaker to the cusp of a US$1 trillion market capitalization and igniting a global jump in stocks linked to artificial intelligence (AI).
The Santa Clara, California-based company gained as much as 29 percent in extended US trading, on course for a record high, after saying it expects sales to reach about US$11 billion in the three months ending July.
That gain puts Nvidia on track also to rack up the biggest one-day valuation jump in US company history.
Photo: Reuters
Nvidia, the biggest supplier of the advanced chips required to train a new generation of AI services, inflamed already lofty expectations for a burgeoning technology.
Its rival chipmaker Advanced Micro Devices Inc jumped 10 percent, while its chip supplier, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), rose as much as 3.8 percent in Taipei and equipment supplier Advantest Corp surged as much as 20 percent to an all-time high in Tokyo.
ASML Holding NV, which supplies gear to TSMC, gained more than US$6 billion in early trading in Europe. Along with memorychip maker SK Hynix Inc, they collectively gained more than US$260 billion of value in a market otherwise preoccupied with concerns about the US debt limit and China’s economic slowdown.
Investors this year have doubled down on wagers that the viral success of OpenAI’s ChatGPT and other bots would usher in a new era of spending on the technology that underpins AI.
Nvidia’s chips excel at parallel processing, making them well-suited for training software by bombarding it with data.
The market exuberance drove home growing anticipation around the advent of next-generation AI, which executives around the world have variously likened to the emergence of the Internet and the iPhone.
Under chief executive officer and cofounder Jensen Huang (黃仁勳), Nvidia has positioned itself as the top provider of components for training AI software. That has helped it weather a broader slowdown in technology spending.
Investors were looking to Nvidia for evidence that the surge in interest in AI this year is resulting in higher sales of chips that provide the computing power.
The semiconductor manufacturer delivered that with a revenue forecast for the current quarter that dwarfed the average analyst estimate.
“The transformational surge in AI spending is paying off much earlier than expected,” Morgan Stanley analyst Joseph Moore wrote in a note.
“We simply have no historical precedent for the magnitude of this step function,” he said.
Huang said that the use of the technology is only in its infancy and more tailored products for specific industries are needed.
He has built online services and software tools to help encourage the broader adoption of AI outside of his big customers — cloud providers such as Microsoft Corp and Amazon.com Inc’s Amazon Web Services.
“Truly spectacular orders coming through for NVDA’s A100 and H100 AI chips,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Ltd in Singapore.
“More importantly for Asian equity investors, they point out that all the orders are being passed on to TSMC,” which has “more than adequate” capacity to fill the orders, Anvazadeh said.
STATE SUBSIDIES: The talks over a factory in Dresden have a top end on par with what Japan is offering TSMC and outdo a cap other firms are being offered in Europe Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is in talks to receive German government subsidies for as much as 50 percent of the costs to build a new semiconductor fab in the country, people familiar with the matter said. The government is in ongoing negotiations with TSMC, as well as its partners on the project — Bosch Ltd, NXP Semiconductors NV and Infineon Technologies AG — the people said, asking not to be identified because the deliberations are private. No final decisions have been made and the final subsidy amount could still change. Any state aid must also
South Korea would avoid capitalizing on China’s ban on a US chipmaker, seeing the move by Beijing as an attempt to drive a wedge between Seoul and Washington, a person familiar with the situation said. The South Korean government would not encourage its memorychip firms to grab market share in China lost by Micron Technology Inc, which has been barred for use in critical industries by Beijing on national security grounds, the person said. China is the biggest market for South Korea semiconductor firms Samsung Electronics Co and SK Hynix Inc and home to some of their factories. Their operations in China
GEOPOLITICAL RISKS: The company has a deep collaboration with TSMC, but it is also open to working with Samsung Electronics Co and Intel Corp, Nvidia’s CEO said Nvidia Corp, the world’s biggest artificial intelligence (AI) GPU supplier, yesterday said that it is diversifying its supply chain partners in order to enhance supply chain resilience amid geopolitical tensions. “All of our supply chain is designed for maximum diversity and redundancy so that we can have resilience. Our company is very big and so we have a lot of customers depending on us. And so our supply chain resilience is very important to us. We manufacture in as many places as we can,” Nvidia founder and chief executive officer Jensen Huang (黃仁勳) said in response to a reporter’s question in
BIG MARKET: As growth in the number of devices and data traffic accelerates, it will not be possible to send everything to the cloud, a Qualcomm executive said Qualcomm Inc is betting the future of artificial intelligence (AI) will require more computing power than what the cloud alone can provide. The world’s largest maker of smartphone processors is transitioning from a communications company into an “intelligent edge computing” firm, Qualcomm senior vice president Alex Katouzian said. The edge in question is the mobile device that a user taps to access a network or service, and Katouzian used his time headlining one of the major keynote events at the Computex show in Taipei to make the case for how big a market that would be. The US company’s chips help smartphones harness
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