Nvidia Rides the AI Frenzy with Quarterly Revenues Soaring to 265%

Demand for artificial intelligence (AI) chips is surging. Nvidia's quarterly revenues are here to prove it after the top AI chipmaker announced its revenues have increased by 265%, amounting to $22.1bn compared to last year's quarter.

With the rise in investments made in AI computing by major tech companies like Alphabet, Microsoft, Amazon, and Meta, Nvidia's revenue increase has reportedly come to represent demand for AI. This is especially true when large language models are created by AI engineers using Nvidia's top chips, including the H100.

(Photo: Justin Sullivan/Getty Images)
A sign is posted at Nvidia headquarters on February 05, 2024 in Santa Clara, California.

From the face of AI chips to the face of AI chatbots and social media, the $40,000 Nvidia chips became the most significant commodity in Silicon Valley thanks to OpenAI's ChatGPT, employing its chips for its large language models. Meta intends to increase its overall supply of H100 chips to 350,000 this year, as CEO Mark Zuckerberg announced in January.

Looking forward, Nvidia forecasts its sales for the current quarter to be roughly $24 billion, which is more than quadruple the amount from the same period last year and higher than the $22 billion average prediction by experts.

Consequently, after hours, shares of the California-based corporation, which has overtaken Alphabet, the parent company of Google, and climbed to a market capitalization of $1.8 trillion, surged 6.5% to $718.71.

AI Frenzy Continues

Nvidia CEO and founder Jensen Huang notes that the "tipping point" has been reached for accelerated computing and generative AI. Demand is soaring globally across businesses, sectors, and countries.

According to reports, investors closely watch Huang's ability to sustain Nvidia's stratospheric growth rates as the company focuses on new products like the B100, its top-tier AI chip.

Especially in light of the New York Times story, massive cloud computing firms like Microsoft, Google, and Amazon are creating their artificial intelligence chips to employ in addition to Nvidia and other chip manufacturers to release new AI goods consistently.

Nvidia Rival Chipmakers

Intel gathered several partners and potential clients in Silicon Valley on Wednesday to discuss its plans to offer manufacturing services, which might increase the industry's capacity to construct AI. Intel has long dominated the regular microprocessor chip market but trails behind in AI chips. Among those was Sam Altman, the CEO of OpenAI and a significant user of Nvidia hardware.

Nvidia rival AMD, on the other hand, currently has a share increase of 117% over the past 12 months, spurring Wall Street with the company's expanding AI possibilities. With the second-largest GPU market share, the business has been biting at Nvidia's heels for years, making it undoubtedly Nvidia's most prominent opponent.

According to reports, AMD was not as prepared as Nvidia in 2023 to start providing its chips to the hordes of AI engineers who immediately needed a lot of processing power. But last December, the chip designer unveiled a new AI GPU that might help it become a successful player in the market.