Hardly any other company benefits as much from the current hype surrounding artificial intelligence (AI) as Nvidia. Companies like Microsoft and Google are literally snatching the accelerators for training AI algorithms out of Nvidia’s hands, and this is reflected in the latest annual report. Nvidia had a turnover of 13.5 billion US dollars from May to the end of July – that is double the figure for the same period last year.
Nvidia easily exceeded the already very high forecast of eleven billion dollars. The three months were therefore a record quarter – and the gap is not even small: Nvidia achieved the previous record at the beginning of 2022 with sales of almost 8.3 billion dollars, thanks to the crypto boom at the time. It was the company’s second fiscal quarter of 2024. Its fiscal year is offset from the calendar by one year and one month.
The increase in profit is even greater: Of the $13.5 billion in quarterly sales, Nvidia posted $6.8 billion in operating profit; this is 13.6 times the comparative value from the previous year. In terms of pre-tax profit, Nvidia even reaches 14.7 times the value at almost seven billion dollars. Nearly $6.2 billion of that remains in the company’s treasury as net income, 9.4 times the quarterly earnings of a year ago.
Data center above everything
Nvidia’s driving force is the data center division, in which Nvidia books sales of the GPU accelerators H100 and A100, among others. Their turnover has increased from around 4.3 billion to 10.3 billion dollars. It was only three years ago that this segment exceeded the billion mark for the first time – even then we wrote about booming data centers.
Nvidia sells its high-end accelerators for well over $10,000, sometimes for more than $20,000. This is reflected in the gross margin, which increased by 5.5 percentage points to 70.1 percent.
Meanwhile, the other divisions are fading in the light of AI accelerators: Sales of GeForce graphics cards rose by 22 percent to almost $2.5 billion. The workstation GPU (formerly Quadro) field has shrunk by a quarter to $379 million, and automotive chip sales are up 15 percent to $253 million.
Nvidia’s sales broken down by division. The AI accelerators are booked under Data Center.
The euphoria never ends
Nvidia is expected to earn even more money in the current third fiscal quarter. The company expects sales of $16 billion, with gross margin increasing to 71.5 percent.
The Financial Times estimates that Nvidia will sell around 500,000 H100 accelerators in 2023. Added to this are the A100 models from the previous generation, which are still in demand. Only TSMC’s manufacturing capacity is slowing down growth: According to its own statements, Nvidia could sell more H100 chips, but TSMC does not have enough packaging plants to marry the GPUs and HBM memory on the carriers.
TSMC is expanding its packaging capacity. And Nvidia does not seem to see the AI hype abating – according to the Financial Times, the company wants to produce between 1.5 million and 2 million H100 accelerators in 2024. Meanwhile, the stock market was happy to accept Nvidia’s business figures: the share rose by a good eight percent in after-hours trading. This makes Nvidia a trillion company again.
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