U.S.-based chipmaker Nvidia, the company at the center of the AI boom posted Wednesday record quarterly revenues, more than triple when compared to a year earlier, igniting a massive stock rally in after-hours trading that saw its shares breach the $1,000 mark for the first time.
The California-based company posted record revenue of $26.04 billion for the first quarter that ended April 28, up 262% from almost $7.2 billion in the same period last year. Analysts had predicted sales of about $24.7 billion and earnings of $5.65 a share.
The company said it also saw record quarterly data center revenue of $22.6 billion, which soared 427% from the same period of 2023.
"The next industrial revolution has begun," founder and CEO Jensen Huang said in a statement. Huang predicted that the companies snapping up Nvidia chips would use them to build a new type of data centers he called "AI factories" designed to produce "a new commodity – artificial intelligence."
"Our data center growth was fueled by strong and accelerating demand for generative AI training and inference on the Hopper platform," he said.
"Beyond cloud service providers, generative AI has expanded to consumer internet companies and enterprise, sovereign AI, automotive and health care customers, creating multiple multibillion-dollar vertical markets," he added.
Net income, meanwhile, soared a massive 628% to almost $14.9 billion in the first quarter from approximately $2 billion in the same period last year.
The record financial results came as demand for AI is booming globally and Nvidia is increasing its collaborations with major tech companies.
The AI poster child's stock has surged 90% so far this year, and a close at Wednesday's after-hours price in the next day's Wall Street trading session would be a new record high.
Nvidia announced Tuesday new AI performance optimizations and integrations for Microsoft's Windows operating system that help deliver maximum performance.
The collaboration will help developers build and deploy AI applications faster, while the integrated solutions with Microsoft Azure and Windows PCs will simplify AI model deployment and optimize route mapping and app performance, Nvidia said Tuesday in a statement.
Nvidia-powered systems, in addition, swept the top three spots and took seven of the top 10 rankings of the world’s most energy-efficient supercomputers, known as the Green500, according to the company.
"The strong showing demonstrates how accelerated computing represents the most energy-efficient method for high-performance computing," the firm said Tuesday in a separate statement. "The ability to do more work using less power is driving the construction of more Grace Hopper supercomputers around the world."
With the strong financial results, Nvidia shares jumped 7.2% to a record $1,018 per share on the Nasdaq in after-hours trading after closing Wednesday at $949.50 a share.
The company also announced a 10-for-1 forward stock split of Nvidia's issued common stock to make stock ownership more accessible to employees and investors. The split will be effected through an amendment to Nvidia’s Restated Certificate of Incorporation, which will result in a proportionate increase in the number of shares of authorized common stock.
Each record holder of common stock as of the close of market on Thursday, June 6, 2024, will receive nine additional shares of common stock, to be distributed after the close of market on Friday, June 7, 2024.
Demand remains robust
Delivering robust first-quarter results, that beat Wall Street and analysts' estimate, the chipmaker said it expects second-quarter revenue to be $28 billion, plus or minus 2%, underscoring the booming demand for generative AI systems would likely persist. Analysts on average were expecting revenue of $26.66 billion, according to LSEG data.
During a conference call with analysts, Huang said Nvidia's upcoming Blackwell AI chips will ship in the current fiscal quarter, with production increasing in the following quarter.
Chief Financial Officer Colette Kress said demand for Blackwell chips could exceed supply "well into next year."
Nvidia's contract chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC) has also been working to increase its advanced packaging capacity, a key supply-chain constraint for the processors. The company said in April it expects to more than double its advanced packaging capacity this year.
"Demand for NVIDIA's GPU chips remains white-hot," said Logan Purk, an analyst at Edward Jones. "These results are likely enough to satiate investors' appetites, and reassure the market that AI investment has not seen a slowdown yet."
Dominating more than 80% of the market for AI chips, Nvidia stands in a unique position as both the largest enabler as well as the beneficiary of surging AI development.
Nvidia's market value topped $2 trillion on Feb. 23, surpassing Amazon and Alphabet, Google’s parent company, to become the third-most valuable publicly traded company in the U.S.
Its market value stood at $2.34 trillion at Wednesday's close, trailing Apple at $2.93 trillion and Microsoft at $3.2 trillion.