Nvida revenues rise 265% on AI chips

Looks set to make Nvidia more valuable than Amazon and Alphabet

Nvidia’s fourth quarter earnings beat even the sky high expectations of Wall Street analysts when the company submitted its reports for the three months ending in January.

Revenues for the quarter were $22.1 billion, compared with a forecast of $20.62 billion; the company's total revenue rose 265% compared with last year.

Furthermore, the company said it expected $24 billion in revenues for the current quarter owing to the colossal demand for chipsets used to train AI models, and an easing of supply chain issues. Its Hopper chips for servers have been in particularly high demand, with Meta alone reported to be looking to bring its holding of Hopper H100 chips to 350,000 this year.

The biggest increase in sales was reported in Nvidia's Data Center business. Income rose 409% to $18.40 billion, with over half of those going to large cloud providers.

Large technology companies make up 40% of Nvidia's revenues, but CEO Jensen Huang said that organisations in all sectors are rushing to get on board the AI boom.

"Every company is built on their proprietary business intelligence and, in the future, their proprietary generative AI," he told analysts. "Now every industry is on board."

The AI chips market is restricted by supply rather than demand. The Silicon Valley chipmaker is due to release a new chip called B100 later this year which will only add to the scramble.

"We do the best we can to allocate fairly and to avoid allocating unnecessarily," Huang told analysts, as reported by Business Insider.

The world's largest semiconductor manufacturer, Taiwan's TSMC, has improved its capacity, which should remove one of the bottlenecks to increased production over coming quarters.

However, as the dominant supplier of AI chips, Nvidia could face increased antitrust action. The company confirmed it is already talking to regulators in the UK, EU and France.

There is also the question of China, once one of Nvidia's largest individual markets. Nvidia is still selling chips to the country, although the most advanced processors are restricted by US sanctions. Sales in China are down from 25% of the total to single figures, and the company faces competition from that country's domestic industry, which is gearing up to replace US supplies. However, the drop in sales to China has been more than offset by increased demand elsewhere.

The massive surge in demand for AI chips means that these are now the mainstay of Nvidia's business, rather than GPUs for gaming.

Its trajectory looks set to make Nvidia the third most valuable US-listed company behind Microsoft and Apple, and ahead of Alphabet and Amazon.