NVIDIA profit surges over 600% as ‘AI factories’ take-off

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AI chipmaker NVIDIA has reported record-breaking financial results for the first quarter ended April 28, 2024, with the company’s revenue hitting $26bn, marking a staggering 262 per cent rise compared to the same period last year.

Furthermore, the company reported a net income of $14.8bn, reflecting a 21 per cent increase from the previous quarter and a 629 per cent surge from a year ago. NVIDIA said this performance was primarily driven by the company’s data centre business, which achieved a record quarterly revenue of $22.6bn, up 23 per cent from the prior quarter and marking a rise of 427 per cent year-over-year.

As a result, the GAAP earnings per share for the quarter was $5.98.

“The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centres to accelerated computing and build a new type of data centre — AI factories — to produce a new commodity: artificial intelligence,” said Jensen Huang, founder and CEO of NVIDIA.

“AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities,” he added.

Strong generative AI demand

Huang attributed the substantial data centre growth, in particular, to surging demand for generative AI training and inference on NVIDIA’s Hopper platform. This demand has extended beyond cloud service providers to include consumer internet companies, enterprises, sovereign AI, automotive, and healthcare sectors, each creating multibillion-dollar vertical markets, he said.

NVIDIA is also preparing for its next wave of growth with its so-called Blackwell platform, which is now in full production and supports trillion-parameter-scale generative AI. Additionally, the company introduced its Spectrum-X offering, opening a new market for large-scale AI in Ethernet-only data centres. The company on Wednesday further announced NVIDIA NIM, a new software offering for enterprise-grade, optimised generative AI.

As part of its latest quarterly results, the tech giant further announced a ten-for-one forward stock split. This split will be executed through an amendment to NVIDIA’s Restated Certificate of Incorporation. Each shareholder of record as of the close of market on Thursday, June 6, 2024, will receive nine additional shares for each share held. The distribution will occur after the market closes on June 7, 2024, with trading on a split-adjusted basis commencing at the market open on June 10, 2024.

Finally, NVIDIA is raising its quarterly cash dividend by 150 per cent, increasing from $0.04 per share to $0.10 per share of common stock. On a post-split basis, this is equivalent to $0.01 per share.