Nvidia reports 122% revenue growth on surging demand for data center chips

Nvidia reported earnings after the bell that beat Wall Street expectations for earnings and guidance, and provided stronger-than-expected guidance for the current quarter.

Nvidia shares fell nearly 4% in extended trading.

Nvidia said it expected about $32.5 billion in current quarter revenue, versus $31.7 billion expected by analysts, according to StreetAccount.

Net income during the quarter was $16.6 billion, or $0.67 per share, versus $6.18 billion, or $2.48 per share, in the year-ago period. 

Nvidia is the primary beneficiary of the ongoing artificial intelligence boom. Its market value has expanded more than nine times since the end of 2022 and was up 34% since the company’s last earnings report. 

Revenue continues to surge at the chipmaker, rising 122% on an annual basis during the quarter.

Revenue in Nvidia’s data center business, which includes its AI processors, climbed 154% from a year earlier to $26.3 billion, accounting for 88% of total sales. IT also topped StreetAccount expectations of $25.24 billion.

Much of these sales go to a handful of cloud service providers and consumer internet companies like Microsoft, Alphabet, Meta, and Tesla. Nvidia’s chips, such as the H100 and H200, are used in the vast majority of generative AI applications, such as OpenAI’s ChatGPT.

Nvidia’s gaming business used to be the company’s primary focus before AI datacenter chips started growing so strongly. Gaming revenue increased 16% from a year ago to $2.9 billion, beating StreetAccount’s estimate of $2.7 billion.

Nvidia said it approved $50 billion in share buybacks.