Nvidia expects to earn $11bn next quarter due to ‘surging demand’ for its AI products, which has seen its shares rise significantly.
Despite a slump in the PC market, Nvidia’s forecast for its next quarter has gone far past estimations and created new excitement around the company.
The company’s had a revenue drop of 13pc in its latest fiscal quarter, reaching $7.19bn compared to $8.28bn in the same period last year. However, the company’s net income rose by 26pc in the same period, while its operating expenses fell by 30pc.
The results managed to beat analyst expectations, while the company’s forecast for its next quarter has seen shares rise by 26pc, CNBC reports.
Nvidia expects to earn $11bn in revenue for its next fiscal quarter, as the company plans to boost production to meet the “surging demand” for its data centre products.
The company’s data centre revenue hit a record $4.28bn, rising 14pc compared to the same period last year. This section of the company had significant developments, such as a partnership with ServiceNow and a collaboration with Medtronic to bring AI to IT and medical devices, respectively.
Earlier this month, the company revealed that Google Cloud is using Nvidia’s L4 GPU and Vertex AI help companies develop generative AI applications. Nvidia is also in a multi-year collaboration with Microsoft, in a bid to build one of the most powerful AI supercomputers in the world.
Nvidia founder and CEO Jensen Huang said the computer industry is going through two “simultaneous transitions”, which are accelerated computing and generative AI.
“A trillion dollars of installed global data centre infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process,” Huang said.
The company’s strong forecast for the future had a knock-on effect, as AI-related stocks saw a boost of almost $300bn in market capitalisation following Nvidia’s announcement, Reuters reports.
Unsurprisingly, Nvidia’s gaming business had a bleaker quarter, falling 38pc over a year to $2.24bn. A report last month claimed PC sales have taken a hit worldwide, with major suppliers suffering an average drop of 29pc.
10 things you need to know direct to your inbox every weekday. Sign up for the Daily Brief, Silicon Republic’s digest of essential sci-tech news.