Chipmaker Nvidia posts record profit of £12.6bn as artificial intelligence boom grips Wall Street
Nvidia reported record quarterly profits last night, a hotly anticipated number that’s the latest evidence of the artificial intelligence (AI) boom gripping Wall Street.
The US chipmaker, which designs and supplies graphics processing units used to build AI systems, reported profits of £12.6bn in the three months to the end of July, more than double the year-earlier figure.
Revenues rose 122 percent to £22.8 billion.
Full throttle: Nvidia boss Jensen Huang has built one of the most successful companies in the world
The chipmaker has become a frontrunner in the AI boom that has propelled markets forward, and the results of this development are being watched as closely as major economic figures or central bank updates.
Dan Coatsworth, analyst at AJ Bell, said: ‘The company has become so big that it has the power to influence markets around the world, both up and down.’
Dan Ives of Wedbush Securities described it as “the most important earnings report for the stock market this year.”
Despite beating expectations by a wide margin, shares initially faltered in choppy after-hours trading. Wall Street experts had forecast revenue and profit of £21.8bn and £12.1bn respectively, following a bumper first quarter in which revenue rose 262 per cent to £20bn and profits rose almost sixfold to £12bn.
Investors were particularly interested in the results because they feared consumers would spend less money on chips.
Jensen Huang, CEO of Nvidia, said: “Nvidia achieved record revenues as data centers worldwide worked at full speed to modernize the entire computing stack with accelerated computing and generative AI.”
The company expects third-quarter revenue of £24.6bn, following huge growth that has seen its shares rise more than 160 per cent in a year.
The company is at the heart of the AI boom, supplying products to companies including Google, Microsoft and Meta, which have collectively poured billions of pounds into the technology.
In February, it became the fastest company ever to go from a $1 trillion market cap to a $2 trillion market cap
Today, it is worth almost $3.2 trillion (£2.4 trillion). The story of the world’s most valuable chipmaker, founded in 1993, began at a Silicon Valley dinner with Huang and engineers Chris Malachowsky and Curtis Priem who made early bets on markets that barely existed, starting with PC gaming and graphics processing.
The bet on AI has proven to be lucrative. According to a recent analysis by PwC, AI will contribute £12 trillion to the global economy by 2030.
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