With a market value of $3.6 trillion, Nvidia is currently the world’s largest capitalization. On January 3, 2023, the stock was still worth $14, compared to $145 during Thursday’s session on Wall Street. This represents approximately six times the… gross domestic product (GDP) of Belgium. It is an understatement to say that the quarterly results of the graphics processor champion were expected. These were published Wednesday evening, after the close of the American Stock Exchange.
According to a company press release, Nvidia’s turnover amounted to $35 billion in the third quarter of this fiscal year, almost double compared to the same quarter of the previous year (+ 94%). Of this total, 30.8 billion was generated by the data center business and therefore AI. “Gaming”, the group’s historic business, generated “only” $3.3 billion over the quarter.
Given its leadership in the field of AI, Nvidia is able to dictate its prices and generate big margins. On its turnover of 35 billion dollars, the company generated a net profit of 19 billion dollars.
At the opening of Thursday’s session on the New York Stock Exchange, the action hesitated between rising and falling.
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Strong demand for the “Hopper”
The group said that demand for the “Hopper” and expectations for the “Blackwell”, which has just been launched on the market, are “incredible”. The Hopper is a family of microprocessors that includes the H100, the firm’s flagship product, by far the most popular in the sector and worth several tens of thousands of dollars per piece.
In mid-March, Nvidia presented the Blackwell, a family of GPUs successor to the H100, which it describes as “the most powerful chip in the world”. “We expect demand for Blackwell to exceed supply for several quarters”said Nvidia. “These results reinforce the idea that Nvidia is a once-in-a-generation company, shaping the next industrial revolution.”commented the company.
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Among the few downsides, there is the fact that the company expects a slight decline in its gross margin for the current quarter compared to the previous one, to be in a range between 73% and 73.5%. This margin had already eroded in the second quarter, due to the use of more expensive systems in data centers. “We could look for the little beast, but many companies would tear their arm off for a margin greater than 70%”put the company into perspective, “and this threshold does not seem to be in danger in the short term”.
gullNvidia continues to demonstrate its dominance in the AI chip market […] but fears remain about the pace of Blackwell’s production and the concentration of its customers.
Diversification
Furthermore, Nvidia is seeking to expand, particularly in automobiles and professional visualization (graphics), but data centers still represent around 88% of its turnover. “Nvidia continues to demonstrate its dominant position in the AI chip market […] but fears remain about the pace of Blackwell’s production and the concentration of its customers.reacted analyst Jacob Bourne.
The big players in generative AI such as Microsoft, Google, Amazon Meta and OpenAI already use hundreds of thousands of GPU chips and thus constitute a significant part of the demand for Nvidia. What if they manage to make their own chips?
