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Nvidia Revenue Doubles on Demand for A.I. Chips, and Could Go Higher [1]

['Don Clark']

Date: 2023-08-23

Nvidia’s prediction and lofty market cap became a symbol for the growing exuberance surrounding A.I., which is transforming many computing systems and the way they are programmed. They also sharply raised the interest in what Nvidia might say the next time about chip demand for its current quarter, which ends in October.

Nvidia projected third-quarter sales of $16 billion, nearly triple the level a year ago and $3.7 billion more than analysts’ average expectations of around $12.3 billion.

The financial performance of chip makers is often considered a harbinger for the rest of the tech industry, and Nvidia’s strong results could reignite enthusiasm for tech stocks on Wall Street. Other tech companies like Google and Microsoft are spending billions and making little on A.I., but Nvidia is cashing in.

Jensen Huang, Nvidia’s chief executive, said major cloud services and other companies were investing to bring Nvidia’s A.I. technology to every industry. “The number of applications is just quite spectacular,” he said in an interview after a conference call with analysts. “Every single data center will be accelerated.”

Nvidia’s share price was up more than 9 percent in after-hours trading.

Until recently, Nvidia got the biggest share of its revenue from sales of GPUs for rendering images in video games. But A.I. researchers started using those chips in 2012 for tasks such as machine learning, a trend that Nvidia exploited over the years by adding enhancements to its GPUs and many pieces of software to reduce labor for A.I. programmers.

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[1] Url: https://www.nytimes.com/2023/08/23/technology/nvidia-earnings-chips.html

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