NVIDIA, the undisputed leader in AI chip technology, posted a remarkable 94% year-over-year revenue increase in the third quarter, underscoring its dominance in the rapidly expanding AI sector. The company reported $35.1 billion in revenue and $19.3 billion in net profit, doubling its bottom line from the previous year.
For the fourth quarter, NVIDIA projected revenue of $37.5 billion, surpassing analysts’ expectations. The company also announced that its next-generation AI chip, Blackwell, would begin shipping later this year, although supply constraints will likely extend into the next fiscal year. Major players in the tech industry, including Microsoft, Google, and Meta, are eagerly awaiting shipments of the new chip.
In a statement, CEO Jensen Huang emphasized the exceptional demand for both its existing chips and Blackwell, noting that leading AI developers are rapidly scaling up their infrastructure to meet the growing need.
Despite the positive outlook, NVIDIA’s stock dipped 2% in after-hours trading.
The company’s market value has seen meteoric rises, surpassing $2 trillion in February and three trillion dollars in June, recently reclaiming its position as the most valuable chip maker.
NVIDIA’s chips were originally designed for computer graphics. They have seen a surge in demand as the go-to solution for AI tasks, and tech behemoths diving into AI development have poured billions into acquiring these chips.
While NVIDIA has maintained robust growth over the past two years, the Wall Street Journal reports that sustaining its dramatic revenue growth rates is increasingly challenging. After a more than threefold revenue surge in the first quarter, growth has decelerated in subsequent quarters.
NVIDIA faces mounting competition from AMD, which anticipates $5 billion in AI chip sales this year. Innovative AI chip startups are also emerging, offering novel approaches for AI model development, particularly for companies like Dell Technologies. Moreover, tech giants like Amazon and Google are developing proprietary AI chips to reduce their reliance on NVIDIA.
Antitrust regulators in Europe and the U.S. closely scrutinize NVIDIA’s market dominance, given its current 80% share of the AI chip market.
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