Nvidia Reaps AI Chip Demand As Profit Surges

Tom Jowitt,
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Quarterly profits at Nvidia rocket up 843 percent, as GPU powerhouse benefits massively from demand for AI chips

GPU titan Nvidia is reaping the reward as the demand for artificial intelligence (AI) chips continues to build.

In its second quarter results, Nvidia revealed that year on year quarterly profits have risen a staggering 843 percent, while quarterly revenues has also risen 101 percent.

The firm has been blessed in recent years thanks to the surge in demand for GPUs during the Covid-19 pandemic, and now the surge in demand for chips suitable for AI tasks.

Nvidia chief executive Jensen Huang. Image credit: Nvidia
Nvidia chief executive Jensen Huang. Image credit: Nvidia

Profit surge

This helped Nvidia in May to surpass $1 trillion (£810bn) in market capitalisation as its stock surged amid the ongoing AI boom among the data centre segment.

The firm is currently valued at $1.19 trillion, as of Thursday afternoon.

Nvidia is seen by investors as a key player in the AI field. A few months ago Nvidia revealed it is building a supercomputer specialised for generative AI tasks in Israel that will be one of the world’s fastest high-performance systems.

Now for its second quarter ending 30 July, Nvidia posted a net profit of $6.2 billion, up 843 percent from $656m in the same year-ago quarter.

Revenues meanwhile rose 101 percent to $13.5 billion, from $7.2 billion a year earlier. Sales also rose 88 percent from the previous quarter, and $11.22 billion revenue had been expected by Refinitiv.

Nvidia also reported $10.32 billion in data centre revenue, which was up 171 percent year over year.

AI boom

“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” said Jensen Huang, founder and CEO of Nvidia.

Nvidia chief executive Jensen Huang. Image credit: Nvidia
Nvidia chief executive Jensen Huang. Image credit: Nvidia

“Nvidia GPUs connected by our Mellanox networking and switch technologies and running our CUDA AI software stack make up the computing infrastructure of generative AI,” Huang added.

“During the quarter, major cloud service providers announced massive Nvidia H100 AI infrastructures. Leading enterprise IT system and software providers announced partnerships to bring Nvidia AI to every industry,” Huang concluded. “The race is on to adopt generative AI.”

During the second quarter of fiscal 2024, Nvidia returned $3.38 billion to shareholders, and is sitting on $16 billion in cash and cash equivalents.

Nvidia’s strong sales and forecast underscore how crucial it’s graphics processing units (GPUs) have become to the generative AI boom.