With its sales forecast, the graphics card specialist exceeded the average expectations of the analysts by around 50 percent. NVIDIA chips and software are well suited for applications based on artificial intelligence.
NVIDIA forecast sales of about $11 billion for the quarter ending in July, with a range of two percent more or less. Analysts had expected an average of around $ 7.2 billion.
In a telephone conference with journalists, company boss Jensen Huang spoke of “incredible orders” for upgrading data centers. They would be geared more towards AI applications.
Last quarter, NVIDIA’s data center technology revenue hit a record high, up 14 percent to $4.28 billion. Originally developed for graphics cards, NVIDIA technologies have a long history of doing the computing behind artificial intelligence applications.
In recent months, the chatbot ChatGPT and software that can generate images based on text descriptions have triggered a new AI hype. Many companies want to keep up with such applications, which increases the need for specialized technology in data centers.
Analysts are now wondering whether the surprisingly high sales forecast for the current quarter is an outlier or an indication of a consistently large NVIDIA business. Huang emphasized that the use of artificial intelligence is only just beginning.
Overall, NVIDIA sales in the first quarter ended April fell by 13 percent to $7.19 billion (6.7 billion euros). The main reason for this was a slump in business with graphics cards for personal computers. This shrank by 38 percent to 2.24 billion dollars. The PC market is currently weak after the rapid sales at the beginning of the corona pandemic.
Bottom line, NVIDIA ended the quarter with a profit of $2.04 billion, up from $1.62 billion a year earlier.
Surprisingly good figures and business prospects for the US chip group NVIDIA have caused a strong upward trend in important shares in the industry. NVIDIA shares temporarily gained 25.22 percent in US trading on the NASDAQ to $382.92.
The shares of the specialist for graphics card, server and AI chips had already more than doubled in value in the previous year. Another plus of 20 percent would be around 150 billion dollars (139 billion euros) in value on the stock exchange in one fell swoop – then more than 900 billion dollars. Papers from rival AMD (Advanced Micro Devices) can also benefit on Thursday, gaining 10.95 percent on the NASDAQ to $120.13.
NVIDIA massively surpassed market expectations with its revenue guidance for the current quarter. The graphics card specialist forecast sales of around eleven billion dollars for the quarter running until the end of July. Analysts had expected an average of around $ 7.2 billion.
In the last quarter, sales fell 13 percent year-on-year to $7.19 billion (6.7 billion euros) – but that was also more revenue than experts expected. The business with technology for data centers rose to a record level. A driving force was the demand for capacities for artificial intelligence (AI) applications, emphasized NVIDIA. Originally developed for graphics cards, NVIDIA technologies have long proven themselves for AI applications. The topic of AI is currently on everyone’s lips on the capital market and is arousing fantasies among investors about future business.
Bottom line, NVIDIA had a profit of $2.04 billion, down from $1.62 billion in the same quarter last year.
Bernstein Raises Target for NVIDIA to $475 – ‘Outperform’
The US analysis company Bernstein Research has raised the price target for NVIDIA from 300 to 475 US dollars and left the rating at “Outperform”. The graphics card specialist’s first quarter was “extremely strong” and the consensus estimates for sales and earnings per share were clearly exceeded, analyst Stacy Rasgon wrote in a study available on Thursday. Anyone who wants to bet on AI as an investor is probably quite well off with NVIDIA – even if the share seems expensive at first glance.
Barclays raises target for NVIDIA to $500
The British investment bank Barclays has raised the price target for NVIDIA from 275 to 500 US dollars in the face of an “extraordinarily strong quarterly report” and left the rating at “Overweight”. The wave of artificial intelligence is making landfall, analyst Blayne Curtis wrote in a study published on Thursday. The market is moving fast and the chip and processor manufacturer’s products seem to be the only solution to drive this wave forward.
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