Nvidia CEO Jensen Huang stated he sees no signs of slowing in the AI chip business.
Nvidia's share price topped $1,000 for the first time after the chipmaker reported estimate-beating financial results for the fiscal quarter ended April 30 on May 22, signaling continuing momentum that CEO Jensen Huang attributed to accelerating demand for A.I. processors. "Beyond cloud service providers, generative A.I. has expanded to consumer internet companies, and enterprise, sovereign A.I., automotive and healthcare customers, creating multiple multibillion-dollar vertical markets," Huang said in a statement. He anticipates much of this year's revenue will be attributed to Nvidia's next-generation A.I. graphics processing unit, Blackwell, which is in full production.
The Santa Clara, California-based company's earnings have become a gauge for investors assessing the strength of the A.I. boom. In the first quarter, Nvidia's profit and revenue rose by 628 percent and 268 percent, respectively, compared to the same period last year—its most profitable and highest sales quarter ever. "People want to deploy these data centers right now," Huang said in an interview with Yahoo Finance. "They want to put our [graphics processing units] to work right now and start making money and start saving money. And so that demand is just so strong."
Tech giants have collectively committed $200 billion to resources including semiconductors and data centers needed to power A.I. services, providing a growth catalyst for Nvidia, now the third most valuable public company in the U.S. after Microsoft and Apple, at $2.4 trillion. Nvidia's data center revenue climbed 427 percent year over year to $22.6 billion, comprising 86 percent of the company's total revenue for the three-month period. While Wall Street had raised concerns about Nvidia's dependence on hyperscalers like Google, Microsoft and Amazon—especially as those tech giants develop their own A.I. accelerator chips—finance chief Colette Kress stated that large cloud providers accounted for less than half (around 45 percent) of the company's data center revenue. Meta's announcement of Llama 3, its latest large language model using 24,000 of Nvidia's H100 GPUs, provided additional momentum for the quarter.
Huang emphasized that demand for both Hopper and Blackwell platforms will outstrip supply well into 2025, with the complexity of the products challenging Nvidia's efforts to keep pace. Separately, Nvidia announced a 10-for-1 stock split effective June 7, which will reduce the share price from approximately $950 to $95, making shares more accessible to average investors and employees seeking to purchase whole shares.