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Nvidia CEO Jensen Huang speaks of "incredible orders": Artificial intelligence gives Nvidia an order boom and the stock a record high

Photo: Rick Wilking/ REUTERS

The chip company Nvidia is benefiting massively from the boom in artificial intelligence. The graphics card specialist's sales forecast exceeded analysts' average expectations by around 50 percent. Company boss Jensen Huang (60) spoke in a conference call with journalists on Thursday night of "incredible orders" for the upgrade of data centers. Chips and software from Nvidia are well suited for applications based on artificial intelligence. They are now being geared even more towards AI applications.

Nvidia held out the prospect of sales of around eleven billion dollars (10.25 billion euros) for the quarter running until the end of July. Analysts had expected an average of around 7.2 billion dollars. The group is expanding strongly: Nvidia is also playing an increasingly important role in German industry with its applications and cooperations.

Investors reacted enthusiastically. Nvidia shares jumped nearly 30 percent in after-hours U.S. trading, hitting a new record high. With a year-to-date gain of more than 200 percent, Nvidia shares top the list of winners in the Nasdaq 100. Since the interim low in October, the stock has almost tripled.

Nvidia could set Apple's daily record

On Thursday night, Nvidia's market capitalization rose by almost $220 billion to $970 billion at times. Most recently, it was still around 950 billion US dollars – making Nvidia worth almost six times as much as Germany's most expensive stock exchange group SAP (160 billion dollars).

If this trend is confirmed and the growth continues at this level at the beginning of regular US trading, it would be the largest daily gain ever posted by a private listed company. The previous record is held by the US company Apple, which increased its market value by 2021 billion dollars within one day in November 191. This is followed by Amazon ($190 billion in February 2022), Microsoft ($150 billion in March 2020) and Tesla ($143 billion in January 2022).

With a valuation of almost three trillion dollars, Apple is still the most valuable private stock exchange group in the world. Despite the recent jump in its share price, Nvidia is still a long way from reaching the trillion mark.

Quarterly sales fall by 13 percent

In the past quarter, Nvidia's revenue from data center technology reached a record high, up 14 percent to $4.28 billion. Nvidia technologies, originally developed for graphics cards, have long proven themselves for the computing work 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 revenue forecast for the current quarter is an outlier or an indication of a permanently large Nvidia business. Huang emphasized that the use of artificial intelligence is only just beginning.

Overall, Nvidia revenue fell 13 percent to $7.19 billion in the fiscal first quarter ended in April. The main reason for this was a slump in the 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 roaring sales at the beginning of the Corona pandemic. The bottom line is that Nvidia ended the quarter with a profit of $2.04 billion, down from $1.62 billion a year earlier.

la/Reuters, dpa