Nvidia said its latest generation of chips are in “great shape” as the world’s most valuable company reported another strong quarter of revenue growth thanks to high demand for the infrastructure that has underpinned the artificial intelligence boom.
Revenue for the quarter to the end of October nearly doubled from a year ago, up 94 per cent to $35.1bn, according to a release on Wednesday. It was a slower pace of growth from the previous quarter but still well above analysts’ expectations for $33.25bn.
Nvidia’s revenue guidance for the current quarter of $37.5bn, plus or minus 2 per cent, met consensus expectations of $37bn. Still, Wall Street expectations for Nvidia — whose growth has skyrocketed on the intense hype surrounding AI — are lofty, and the shares were down about 1.4 per cent in after-hours trading.
Analysts have been watching closely to see how Nvidia’s new generation of chips, known as Blackwell, launched earlier this year, might affect short-term revenue growth, and whether the chip is encountering any technical issues as it is implemented at scale.
According to a recent report from The Information, the Blackwell chips have experienced problems with overheating in servers. The chip already faced production issues earlier this year.
Asked about the report, Nvidia chief executive Jensen Huang said Nvidia was selling more Blackwell products than expected this quarter, exceeding its previous forecast for “several billion” dollars in sales for the fiscal year.
“We will deliver, this quarter, more Blackwells than we had previously estimated, and so the supply chain team is doing an incredible job working with our supply partners to increase Blackwell,” he said. “Blackwell is in great shape.”
Constraints in Nvidia’s supply chain, including with its crucial manufacturing partner TSMC, have prompted analysts to question how fast the new chips can be brought online in data centres.
Chief financial officer Colette Kress said that customers for Blackwell — which include so-called hyperscalers such as Microsoft, Google and Meta were “racing” to be the first to bring it to market.
Data centre revenue, which includes Nvidia’s Hopper chips that have powered the first wave of the AI market boom, was up 112 per cent year on year to $30.8bn. Big tech companies have poured billions of dollars into the data centre infrastructure that can train and run the models, with the spending spree expected to grow into 2025.
Nvidia’s shares are up more than 200 per cent year to date, as the race to develop and adopt AI fuelled the company’s breakneck growth. With a market value of $3.6tn, it is the world’s most valuable listed company and has come to have an outsized impact on the stock market. Earlier in the year Nvidia was driving about a quarter of the gains on the S&P 500.
Investors have looked to Nvidia’s earnings as a measure of the health of the overall tech market, with all the biggest tech companies making significant investments in AI.
Gross margins were 75 per cent, in line with consensus estimates. Adjusted net income was $20bn, while earnings per share was $0.78, exceeding analysts’ expectations.
Citi analysts said the results were better than expected, with demand for Blackwell expected to exceed supply well into the 2026 fiscal year.
