Nvidia Corp on Wednesday delivered a surprisingly strong revenue forecast and pushed back on the idea that the artificial intelligence (AI) industry is in a bubble, easing concerns that had spread across the technology sector.
The world’s most valuable company expects sales of about US$65 billion in the first quarter of next year — about US$3 billion more than analysts predicted.
Nvidia also said that a US$500 billion dollar revenue bonanza due in coming quarters might be even bigger than anticipated.
Photo: Reuters
The outlook signaled that demand remains robust for Nvidia’s AI accelerators, the pricey and powerful chips used to develop AI models.
Nvidia had faced growing fears that the runaway spending on such equipment was not sustainable.
“There’s been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang (黃仁勳) said on a conference call with analysts. “From our vantage point, we see something very different.”
The upbeat commentary sent Nvidia shares up about 5.4 percent in early trading yesterday before the markets opened in New York.
They had gained 39 percent this year through the close on Wednesday, leaving the company’s market value at US$4.5 trillion.
Nvidia’s results have become a barometer for the health of the AI industry, and the news lifted technology firms in Asia yesterday, with Taiwan Semiconductor Manufacturing Co (台積電) rising 4.3 percent in Taipei, Samsung Electronics Co gaining 5 percent and SK Hynix Inc adding 2.2 percent in Seoul.
Among broader markets, Taipei, Tokyo and Seoul were up between 1.9 percent and 3.2 percent.
Sydney, Singapore, Wellington, Mumbai, Bangkok and Jakarta were also well up, but Hong Kong pared gains to end flat, while Shanghai finished lower.
The company has more than US$500 billion of revenue coming over the next few quarters, Huang said last month.
Owners of large data centers would continue to spend on new equipment, because investments in AI have begun to pay off, he said.
Nvidia chief financial officer Colette Kress on Wednesday went further, saying the company would likely eclipse the US$500 billion target.
“There’s definitely an opportunity for us to have more on top of the US$500 billion that we announced,” she said on the conference call. “The number will grow.”
Nvidia’s third-quarter results also topped analysts’ estimates.
Revenue rose 62 percent year-on-year to US$57 billion in the period, which ended on Oct. 26. Earnings per share were US$1.30.
Analysts had predicted sales of US$55.2 billion and earnings per share of US$1.26.
Nvidia’s main data center unit had revenue of US$51.2 billion in the quarter, compared with an average estimate of US$49.3 billion.
Chips used in gaming PCs — once the company’s chief source of revenue — delivered sales of US$4.3 billion. That compared with an average estimate of US$4.4 billion.
However, Nvidia’s expansion has faced challenges. US restrictions on the shipment of advanced chips to China have largely locked Nvidia out of a massive market for its products.
“Our forecast for China is zero,” Huang said in a Bloomberg Television interview. “We would love the opportunity to be able to re-engage the Chinese market with excellent products.”
Some investors have also expressed concerns about the structure of the deals that Nvidia has struck with customers.
The transactions involve investments in start-ups such as OpenAI and Anthropic PBC, raising the issue of whether the pacts are creating artificial demand for computers.
Nvidia’s investment in OpenAI, which still has not been finalized, would provide a good return, Huang said.
Backing Anthropic would help establish ties with a company that has not been a big user of Nvidia’s technology, he added.
Additional reporting by AFP
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
The demise of the coal industry left the US’ Appalachian region in tatters, with lost jobs, spoiled water and countless kilometers of abandoned underground mines. Now entrepreneurs are eyeing the rural region with ambitious visions to rebuild its economy by converting old mines into solar power systems and data centers that could help fuel the increasing power demands of the artificial intelligence (AI) boom. One such project is underway by a non-profit team calling itself Energy DELTA (Discovery, Education, Learning and Technology Accelerator) Lab, which is looking to develop energy sources on about 26,305 hectares of old coal land in
Netflix on Friday faced fierce criticism over its blockbuster deal to acquire Warner Bros Discovery. The streaming giant is already viewed as a pariah in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of traditional industry practices. As Netflix emerged as the likely winning bidder for Warner Bros — the studio behind Casablanca, the Harry Potter movies and Friends — Hollywood’s elite launched an aggressive campaign against the acquisition. Titanic director James Cameron called the buyout a “disaster,” while a group of prominent producers are lobbying US Congress to oppose the deal,
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
RSS