Source: The New York Times
(Archive)In a sign that the tech industry’s next big boom is picking up steam, Nvidia on Wednesday predicted rapid growth in the already rabid demand for the chips it makes to build artificial intelligence systems.
The Silicon Valley company’s products, called graphics processing units, or GPUs, are used to create the vast majority of A.I. systems, including the popular ChatGPT chatbot. Tech companies ranging from start-ups to the industry’s giants are fighting to get their hands on them.
Nvidia said heavy demand from cloud computing services and other customers for chips to power A.I. systems caused revenue for its second quarter, which ended in July, to jump 101 percent from a year earlier, to $13.5 billion, while profit surged more than ninefold to nearly $6.2 billion.
That was even better than what Nvidia had projected in late May, when its $11 billion revenue estimate for the quarter stunned Wall Street and helped push Nvidia’s market value above $1 trillion for the first time.
Nvidia’s prediction and lofty market cap became a symbol for the growing exuberance surrounding A.I., which is transforming many computing systems and the way they are programmed. They also sharply raised the interest in what Nvidia might say the next time about chip demand for its current quarter, which ends in October.
Nvidia projected third-quarter sales of $16 billion, nearly triple the level a year ago and $3.7 billion more than analysts’ average expectations of around $12.3 billion.
The financial performance of chip makers is often considered a harbinger for the rest of the tech industry, and Nvidia’s strong results could reignite enthusiasm for tech stocks on Wall Street. Other tech companies like Google and Microsoft are spending billions and making little on A.I., but Nvidia is cashing in.
Jensen Huang, Nvidia’s chief executive, said major cloud services and other companies were investing to bring Nvidia’s A.I. technology to every industry. “The number of applications is just quite spectacular,” he said in an interview after a conference call with analysts. “Every single data center will be accelerated.”
Nvidia’s share price was up more than 9 percent in after-hours trading.
