Nvidia’s Revenue Boosted by ChatGPT

Web DeskAugust 25, 2023
Nvidia's Revenue Boosted by ChatGPT

Nvidia’s latest financial report for the second quarter of its 2024 fiscal year reveals a remarkable surge in its financial performance, particularly driven by its data center division.

The data center wing of the hardware company has demonstrated exceptional growth, recording sales that are more than double compared to the previous year. This division has now firmly established itself as Nvidia’s primary revenue generator, surpassing the gaming division that once held this position.

In contrast, the gaming division’s annual growth is at a modest 21.7%, signaling a decline in value for money perception among PC gamers with each new generation of Nvidia gaming GPUs.

Also Read: Nvidia CEO: AI Has Made It Possible for Anyone to Become a Computer Programmer.

Prior to the release of the earnings report, Nvidia’s stock had shown significant growth, although it experienced a slight dip due to some potential investors capitalizing on profits and expressing concerns about potential earnings shortfalls.

Surpassing financial projections, Nvidia reported an impressive revenue of $13.5 billion, reflecting an 88% growth from the previous quarter and a remarkable 101% annual increase.

Of this revenue, Nvidia’s data center division contributed a substantial $10 billion, experiencing an astounding sequential increase of 141% and an annual growth of 171%. This growth is attributed to high demand from internet and cloud computing companies, driven by large language model development and generative AI utilizing Nvidia’s HGX platform based on Hopper and Ampere GPU architectures.

Nvidia’s chief financial officer noted that this monumental growth in data center revenue is primarily due to the rising demand for their advanced GPU technologies in AI-related applications.

The company exceeded analyst projections for revenue and earnings per share (EPS), reporting $2.70 in EPS. Notably, Nvidia provided a highly optimistic outlook for the ongoing quarter, projecting $16 billion in revenue, potentially achieving a remarkable 170% annual growth rate and elevating the company’s revenue to a new level.

This guidance of $16 billion surpasses the previously forecasted figure of $12.61 billion, indicating Nvidia’s confidence in its continued expansion.

A substantial expansion in Nvidia’s accounts receivable also played a role in driving this remarkable growth, with the figure increasing from $4 billion in the first quarter to $7 billion in the previous quarter.

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