Nvidia was expected. And Jensen Huang’s group responded. For a few weeks already, all Wall Street analysts had their eyes on August 23, the date on which the American group specializing in graphics chips announced its results for the staggered second quarter of 2024. The least we can say is that they got their money’s worth.
Driven by artificial intelligence as well as its GPUs, components particularly suitable for running so-called generative AIs, the American giant has doubled its turnover to reach 13.5 billion dollars. Net profit stands at 6.2 billion, multiplied by almost 10 compared to the previous year. Analysts’ forecasts, which forecast revenues of 11.13 billion, have been largely beaten. As part of its forecast for the next quarter, Nvidia again surprised estimates, with expected revenues around 16 billion, against 12.6 billion according to the consensus of analysts.
Wall Street “eagerly awaited Nvidia’s quarterly results and revenue estimates after the bell (market close, editor’s note). The godfather of IA Jensen and Nvidia have achieved a homerun”, judge Daniel Ives, analyst for the firm Wedbush. Naturally, the title took 8% in the first post-closing trades of the American stock markets. The capitalization of Nvidia, which peaked Wednesday evening at 1.160 billion dollars, should experience a new boost in the coming hours.
While the share price undoubtedly remains decorrelated from the fundamentals of the company, it is clear that the frenzy towards artificial intelligence, the gold rush for which Nvidia provides the shovels and pickaxes with its graphics chips, does not not be denied. All this despite a still uncertain economic context and the difficulty, including for the giants of the sector such as Microsoft and Google, to monetize technology. For Daniel Ives, the results of Nvidia thus prove “that this is NOT a question of an artificial cycle linked to the hype, but of a real transformation” of the economy.
The second good news is that Nvidia, a factoryless company that only designs these chips, has succeeded in the industrial gamble of beefing up its supply chain. In other words, to ensure that its exclusive partner – the Taiwanese TSMC – succeeds in increasing the speeds of its production lines to produce even more GPUs.
And the best is probably yet to come for the company. Jensen Huang, on the sidelines of the results, did not fail to mention the “huge demand” for his products. “The data centers installed in the world currently represent approximately one trillion dollars. And they are all moving to generative AI,” he explained. Wedbush’s Daniel Ives says AI surge set to drive ‘$800 billion’ spending wave by ‘businesses and consumers over next decade’
