Volkswacht Bodensee - Nvidia doubles revenue, forecasts even more AI spending

Shares leapt nearly five percent in after-hours trading on Wall Street.

Nvidia is considered the bellwether for the AI spending frenzy, with its results largely determined by mega purchases from AI giants such as OpenAI, Amazon, Microsoft and xAI.

"The AI infrastructure buildout is at full steam," CEO Jensen Huang said in a statement.

Revenue for the quarter ending July 26 rose 106 percent from a year earlier and 18 percent from the previous three months, comfortably above the roughly $92 billion analysts had forecast.

Net profit reached $59.7 billion, up 126 percent from a year earlier, though the figure was boosted by $7.8 billion in gains from Nvidia's portfolio of stakes in AI companies.

Nvidia told investors to expect about $108 billion in revenue in the current quarter, well ahead of Wall Street forecasts and a signal that the company sees no near-term slowdown in AI spending.

It also forecast revenue growth of about 70 percent in its next fiscal year, which begins in January, saying sales were being held back by supply constraints rather than any shortage of demand.

Nvidia's biggest customers -- Amazon, Microsoft, Google-parent Alphabet and Meta -- are on track to spend roughly $800 billion on data centers and AI infrastructure this year.

That amount is nearly double last year's total, with analysts expecting industry-wide spending to top $1 trillion.

- 'Only regret' -

That historic windfall has increasingly drawn Nvidia into bankrolling AI expansion through investments in startups.

The company has faced increasing questions about circular financing through investments in its own startup clients, helping them pay for Nvidia's products.

Nvidia's chief financial officer Colette Kress addressed the criticism head-on during the earnings call.

"We recognize the scale of this support (to these companies), and we know some will call this circular financing. We see it differently," she said.

"We're going through a major computing platform shift, the creation of one of the most important technologies in human history, and these are once-in-a-generation companies."

CEO Huang added: "The only regret that I have is that I didn't invest more and sooner."

Nvidia again projected no revenue from sales of AI computing chips in China in its forecast.

Beijing has only recently begun allowing limited quantities of Nvidia's H200 processors into the country, with ByteDance and Tencent reportedly each receiving around 10,000 units in recent weeks -- a fraction of what US export licenses permit.

Even with Wednesday's jump, growth in the company's share price has trailed other chip companies in recent months and pales in comparison to the stratospheric leaps in 2023 that followed the launch of ChatGPT.

That market surge catapulted the California-based company into becoming the most valuable publicly traded company in the world, a perch it still holds ahead of iPhone-maker Apple.

W.Huber--VB