A few minutes every morning is all you need.
Stay up to date on the world's Headlines and Human Stories. It's fun, it's factual, it's fluff-free.
The backstory: Nvidia, a tech powerhouse in the chip-making realm, has been making headlines lately. The chipmaker's stock price has shot up, tripling in value this year. The reason for this big jump is the company’s involvement in the world of artificial intelligence (AI). Remember when OpenAI's chatbot, ChatGPT, took the tech world by storm last year? Nvidia's been riding that wave as the maker of some critical components that AI needs to function. In fact, even the “brain” behind ChatGPT is powered by Nvidia's graphics processing units (GPUs).
So, the company is leading the pack in making chips that speed up AI tasks. Even industry giants like Microsoft and Google have hopped on the Nvidia train, snapping up its powerful processors. Investors have been keeping a keen eye out, searching for signs that this impressive growth isn't just a flash in the pan but a sustained upward trajectory.
More recently: Back in May, Nvidia became the first semiconductor company to reach a US$1 trillion market valuation, though it only stayed in the select spot for a few hours. Still, fewer than 10 companies in the world have ever achieved this milestone.
The development: In the last quarter alone, the company hauled in US$13.5 billion in revenue, along with earnings of US$2.70 per share. Its target for this current quarter is 28% higher than Wall Street projections. That's nearly on par with its total sales for the entire year of 2021. Nvidia is also eyeing US$16 billion in revenue over the next quarter.
Nvidia's data center chip division alone raked in US$10.3 billion in revenue last quarter. Meanwhile, gaming revenue also saw a boost, climbing to US$2.49 billion. Even the automotive-related chip sector pulled in US$253 million. Adding to the positive momentum, the company announced a stock buyback program worth US$25 billion.
“A new computing era has begun,” said Nvidia CEO Jensen Huang in a statement.
“Given the strength of demand for our products worldwide, we do not anticipate that additional export restrictions on our data center GPUs, if adopted, would have an immediate material impact to our financial results,” said Nvidia CFO Colette Kress.
“The world has something along the lines of about a trillion dollars worth of data centers installed, in the cloud, enterprise and otherwise,” said Huang on a call with analysts. “That trillion dollars of data centers is in the process of transitioning into accelerated computing and generative AI.”