The artificial intelligence (AI) gold rush is still going strong, judging by earnings reported Wednesday (May 22) by chipmaker Nvidia.
The company reported that its revenue for the quarter ended April 28 was up 18% compared to the previous quarter and up 262% from the same period a year earlier, reaching $26 billion, according to a Wednesday earnings release.
The company’s sales and profit beat Wall Street expectations, The Wall Street Journal (WSJ) reported Wednesday.
Reuters reported Wednesday that analysts’ estimates on average were $24.65 billion.
Nvidia’s own outlook for the quarter had been $24 billion, Nvidia Executive Vice President and Chief Financial Officer Colette Kress said Wednesday during the company’s quarterly earnings call.
Investors and analysts had been watching for Nvidia’s earnings call as a bellwether for the AI industry, PYMNTS reported earlier Wednesday.
Nvidia Founder and CEO Jensen Huang said in the earnings release that the company’s revenue growth was driven by companies and countries partnering with the chipmaker to transition from their traditional data centers to “AI factories” that will deliver productivity gains in most industries.
Kress said during the call that AI factories are “next-generation data centers” that host accelerated computing platforms where “the data comes in and intelligence comes out.”
“In Q1, we worked with over 100 customers building AI factories ranging in size from hundreds to tens of thousands of GPUs, with some reaching 100,000 GPUs,” Kress said.
Nvidia’s Data Center revenue was up 23% from the previous quarter and up 427% from the same quarter in 2023, according to the release.
Huang attributed the growth in this business segment to demand for generative AI training and inference and the expansion of the technology to a wide range of vertical markets, per the release.
“Generative AI is driving a from-foundation-up full-stack computing platform shift that will transform every computer interaction,” Huang said during the earnings call. “From today’s information retrieval model, we are shifting to an answers and skills generation model of computing. AI will understand context and our intentions, be knowledgeable, reason, plan and perform tasks.”
Looking ahead, Nvidia expects its revenue in the current quarter to total $28 billion, up from the first quarter’s $26 billion, per the release.
That outlook is higher than was expected from Wall Street, even though the projected rate of growth is lower than it has been due to tougher comparisons, according to the WSJ report.
Reuters reported Wednesday that analysts had expected the company’s forecast to be $26.66 billion.
“The demand is really, really high and it outstrips our supply,” Huang said during the call.
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