Nvidia posts strong Q2 results, reports $13.5 billion revenue

“A new computing era has begun,” said Nvidia CEO Jensen Huang.
Sejal Sharma
Representational image of a Nvidia chip
Representational image of a Nvidia chip

Antonio Bordunovi/iStock 

Last night, Nvidia, a U.S-based chipmaker, reported blowout earnings in the second quarter of financial year 2023-24. The company earned $13.51 billion in the second quarter of this year, up by 88 percent from the first quarter and an increase of 101 percent from the second quarter of last year, announced the company.

Nvidia’s enormous growth confirms that the shift towards generative artificial intelligence and large language models is real, not hype. The company is one of the biggest producers of the chip technology powering generative AI.

“A new computing era has begun,” said CEO Jensen Huang, who founded the company in 1993.

Share price jumped 6 percent after the announcement

There has been a 422 percent year-on-year increase in the trillion-dollar evaluation company’s net income. The company expects revenue of $16 billion for the next financial year, plus or minus 2 percent.

The company is expected to grow manifold next year, as Nvidia said that it sees an upward mobility in its demand, for which it has already secured an increased supply.

It’s been an excellent year for Nvidia, which launched the GH200 Grace Hopper Superchip for complex AI workloads and the Nvidia L40S GPU to accelerate complex applications. The GH200 Superchips, which will be available next year, has the same GPU as its H100, the most sought-after AI chip today, but will have three times the memory capacity.

“During the quarter, major cloud service providers announced massive NVIDIA H100 AI infrastructures. Leading enterprise IT systems and software providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI,” added Huang.

Nvidia’s chips have enhanced graphics using AI, giving gamers a whole new world of experience. The company has seen a $2.49 billion revenue from the gaming industry, up 11 percent from quarter one and 22 percent from last year.

A trillion-dollar evaluation company

In May, the company joined the league of US firms valued at over a trillion dollars. Investors have flocked to the chipmaker, a key beneficiary of the AI boom. Even OpenAI, which began the generative AI boom last year with its chatbot, used Nvidia’s H100 Hopper chips to train and run its GPT model.

Nvidia is giving stiff competition to major GPU (graphic processor) companies in China, Taiwan, and Hong Kong - all major players in the field. And the new export rules and regulations that the US brought in in October last year have put the Chinese companies on a back foot. The regulations basically don’t allow China to buy US-made chips, and on the other hand, the US has poured billions of dollars in subsidies into the chip industry.

Nvidia currently exports the A800 processor to China and has been asked by the US administration to stop selling its two top computing chips to the country for AI-related work, reported Reuters.

This has all helped Nvidia in building a GPU monopoly. “Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” added Huang.

But China doesn’t want to fall behind in the AI race. According to a report by the Financial Times, Chinese companies like Baidu, ByteDance, Tencent, and Alibaba have ordered Nvidia to deliver about 100,000 A800 processors and GPUs, the billing for which is about $1 billion and $4 billion, respectively.

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