AI chip boom lifts Nvidia shares after quarter | CNN Business
The artificial intelligence boom is here, and Nvidia is reaping all the benefits.
Shares of Nvidia (NVDA) jumped 28% on Thursday after it reported that earnings and sales rose well above Wall Street’s already high expectations. That was enough for investors to temporarily forget about the dangerous U.S. debt ceiling, sending the broader stock market higher, even after credit rating agency Fitch warned late on Wednesday that the U.S. The UK could soon lose its AAA debt rating in sterling.
Nvidia makes chips that power generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user prompts. This is the type of AI that underlies ChatGPT, Google’s Bard, Dall-E, and many of the other new AI technologies.
“The computing industry is going through two simultaneous transitions: accelerated computing and generative AI,” Nvidia CEO Jensen Huang said in a statement. “One trillion dollars of installed global data center infrastructure will shift from general-purpose computing to accelerated computing as companies race to apply generative AI to every product, service and business process.”
Huang said Nvidia is increasing the offering of its entire suite of data center products to meet the “growing demand” for them.
Last quarter, Nvidia’s profits rose 26% to $2 billion, and sales rose 19% to $7.2 billion, each easily beating Wall Street analysts’ forecasts. Nvidia’s outlook for the current quarter was also significantly (about 50%) higher than analysts’ predictions.
Nvidia shares are up nearly 110% this year.
“There is no better indicator around the underlying demand for AI … than Nvidia’s fundamental story,” said Wedbush analyst Dan Ives. “We see Nvidia at the core heart and lungs of the AI revolution.”