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NVIDIA reported simply extraordinary results last week
When NVIDIA reported its earnings last week, the results were so extraordinary that they needed a closer look. NVIDIA has shattered its quarterly earnings records, with revenue soaring 262 per cent year-over-year, reaching $26 billion.
This growth was predominantly driven by the data centre segment, which alone saw a 427 per cent increase in revenue, totalling $22.6 billion. This is an area which includes GPUs used for AI applications, a crucial technology for companies like Meta running generative AI models.
The net income surge is even more astonishing, jumping 628 per cent to $14.9 billion, achieving a profit margin of 58.5 per cent. Such rapid growth and high profitability are unparalleled, outpacing even the tech giants in cloud earnings.
NVIDIA’s stock rose about 10 per cent on the news, bringing its market valuation to approximately $2.57 trillion, surpassing the combined worth of Amazon and Tesla.
Despite these impressive figures, there are potential risks. NVIDIA’s revenue heavily depends on Big Tech’s capital expenditure, which might fluctuate if AI investments don’t yield their expected returns. Additionally, Big Tech is developing its own AI chips, which could eventually reduce reliance on NVIDIA. Geopolitical risks also loom, particularly regarding Taiwan, home to major chip manufacturing facilities.
However, for now, NVIDIA’s CEO Jensen Huang remains optimistic, buoyed by the company’s spectacular performance and the transformative impact of AI on the tech industry.
Source: Trendline
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