Nvidia nearly doubles revenue as AI chip demand remains strong
Technology • Nov 23, 2024
Nvidia reported strong revenue growth for the quarter ending in October, driven by intense demand for the technology powering the artificial intelligence boom. The company's latest generation of chips, known as Blackwell, were described as being in "great shape" despite earlier production and technical challenges.
Revenue for the quarter surged 94% compared to the same period last year, reaching $35.1 billion. While this marked a slower growth rate than the prior quarter, it surpassed Wall Street estimates of $33.25 billion. Nvidia’s revenue forecast for the current quarter stands at $37.5 billion, in line with analysts’ expectations of $37 billion. Despite these strong numbers, Nvidia's shares dipped 1.2% on Thursday, reflecting the high expectations tied to its rapid growth amid AI hype.
The Blackwell chips, launched earlier this year, have been under scrutiny for their potential impact on Nvidia’s short-term revenue. Reports of overheating issues in servers and earlier production delays raised concerns. However, CEO Jensen Huang stated that Blackwell chip sales this quarter have exceeded forecasts, with the company working closely with supply chain partners, including manufacturing giant TSMC, to ramp up production.
“Blackwell is in great shape,” Huang assured, noting that sales for the fiscal year have already surpassed Nvidia's earlier estimates of "several billion" dollars. The chips are in high demand from hyperscalers such as Microsoft, Google, and Meta, all racing to bring the new technology online in their data centers. Nvidia's data center revenue, which includes the Hopper chips that fueled the initial wave of AI adoption, jumped 112% year-over-year to $30.8 billion. Analysts anticipate this spending spree to continue through 2025 as tech giants invest billions in infrastructure for training and running AI models.
With its shares up over 200% in 2024, Nvidia now has a market valuation of $3.6 trillion, making it the most valuable publicly traded company in the world. Earlier this year, it accounted for nearly a quarter of the S&P 500’s gains, highlighting its outsized influence on the stock market. Gross margins were reported at 75%, meeting expectations, while adjusted net income hit $20 billion. Earnings per share came in at $0.78, exceeding forecasts. Analysts at Citi called the results "better than expected," projecting demand for Blackwell chips to outstrip supply well into fiscal 2026.
Nvidia's performance remains a bellwether for the broader tech sector, as major companies continue to pour resources into artificial intelligence development and adoption.