Computer chip maker Nvidia increased its revenue sharply in the fourth quarter. The company says demand for artificial intelligence continues to rise around the world.
Nvidia, which among other things produces computer chips needed by artificial intelligence companies, accelerated on the stock market during 2023.
The company generated $22.1 billion in the quarter, up from $6.05 billion in the corresponding quarter of the previous year. This equates to approximately NOK 232 billion at today's exchange rate, an increase of 265 percent.
In advance, it was expected to generate income of $20.4 billion in the quarter, according to Bloomberg estimates.
The strongest growth was expected in the data center business, which includes artificial intelligence. In this sector, total revenues reached $18.4 billion, an increase of 409 percent from the fourth quarter of the previous year. Here, analysts expected revenues to end at $17.2 billion.
Adjusted earnings per share were $5.15, versus $4.6 expected. Meanwhile, there is an increase of $0.88 per share in the fourth quarter of 2023.
The stock rose 8.48 percent in after-market trading at 22.55.
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The company has different accounting years, the fourth quarter is the period from November 2023 to January 2024 inclusive.
At the same time, Nvidia is updating its forecast for the first quarter of 2024. The company expects its sales to reach $24 billion in the first quarter of the year, plus or minus two percent, they write in the accounting report.
Jensen Huang, co-founder and CEO of Nvidia, believes generative AI has “reached a tipping point.”
– He says demand is increasing worldwide across industries and countries.
Strong rise in the stock market
Nvidia's share is up more than 220 percent in the past year, and nearly 40 percent since the new year.
The share rose significantly as demand for the company's computer chips increased in line with the development of artificial intelligence. Data chips from Nvidia, for example the H100, are used by AI developers to develop models similar to those used by OpenAI to develop ChatGPT.
Nvidia is among the world's leading manufacturers of graphics cards (GPUs).
– Our data center business is now being fueled by more and more drivers – demand for data processing and training from major cloud providers and GPU specialists, as well as software companies, says Jensen Huang regarding the release of the numbers.
Last week, the company's market value rose to more than $1.8 trillion, placing it in third place among the most valuable companies in the world, surpassed only by Microsoft and Apple.
Thus, the computer chip manufacturer, which was founded in 1993, surpassed both Alphabet, which owns Google, and Amazon in the list.
At the end of stock market trading on Wednesday, the company's market value was about $1,670 billion, or about 17,500 billion Norwegian kroner at today's exchange rate.
– The demand is huge
In the third quarter, which ended on October 29, the company beat expectations and generated revenue of $18.12 billion, up 34 percent from the second quarter and up 206 percent from the third quarter of 2022.
The company has benefited from the rise of artificial intelligence. Investment Director Robert Ness at Nordea calls Nvidia's business state of the art, or The latest and greatest in the field.
– The demand is huge and the increase in profits is insanely good, Næss tells E24.
At midnight Norwegian time, the company is holding a presentation about the quarter. Then Næss hopes one can get an impression of what Nvidia thinks about the future.
– What Nvidia says about the future of the market will be very important. He says the competition is particularly interesting.
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