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Andrew Feinberg
White House Correspondent
Tech giant Nvidia is set to announce that its revenue has doubled and profits have surged again, benefiting from the rapid adoption of generative AI.
Now the world's second-largest publicly traded company after Microsoft, the semiconductor company has seen its shares soar more than 160% since the beginning of the year as investors bet on continued growth in its AI and data center businesses.
On Wednesday, Nvidia is scheduled to update shareholders and analysts on its financial results for the second quarter, which ended at the end of July.
The company had a strong first quarter, so they'll be hoping for another phenomenal performance.
Revenue for the quarter ended April rose 262% to $26 billion, beating industry expectations in the last update.
Nvidia's growth was fuelled by rapid growth in its data centre business, including the development of its H100 graphics card, which is widely used to power generative AI apps such as ChatGPT.
Companies like Meta, Amazon and Microsoft are all customers, each with deep pockets and a desire to build AI products powered by Nvidia's market-leading chips.
Arlene Cheekley, equity analyst at Hargreaves Lansdown
As a result, first-quarter data center revenue grew more than five times compared to the same period last year.
The analyst consensus compiled by Zacks Investment Research predicts that the group's overall revenue could grow 109% in the second quarter as AI-related growth continues to bolster the business.
“Analysts expect this momentum to continue leading up to the company's results release next week,” said Arlyn Cheekley, equity analyst at Hargreaves Lansdown.
“Companies like Meta, Amazon and Microsoft are all customers, each with deep pockets, who want to leverage the power of Nvidia's market-leading chips to build AI products.
“This supports market expectations that second-quarter sales and operating profit could more than double to $28.6 billion (£21.8 billion) and $18.7 billion (£14.3 billion) respectively.”
The analyst said he believes these projections are “achievable” and therefore investors are likely to be particularly focused on outlook for the rest of the year.
Analysts at AJ Bell said Nvidia “has beat consensus expectations and raised guidance in each of the past five quarters,” and agreed that investors will be looking for guidance on what the rest of the year will hold.
He added that investors may be keeping an eye on updates on reports of a delay in the launch of new AI chips using Blackwell architecture, with production expected to ramp up later this year.
