Image: © MichaelVi/Stock.adobe.com
AI is a gift that keeps generating for Nvidia as it rides on a high after demand for its chips soars globally.
Nvidia briefly hit the $2trn valuation mark for the first time on Friday (23 February) soon after its latest earnings call that forecasted a promising quarter ahead.
Shares in the Silicon Valley company, which holds a dominant position in the global AI chips market, rose more than 4pc on Friday morning before dropping a bit. Nvidia’s market value was just under $2trn when the day ended.
The latest valuation milestone comes less than a year after Nvidia was worth $1trn for the first time. It is now the world’s fourth most valuable publicly traded tech company after Microsoft, Apple and Saudi Aramco.
Nvidia posted stellar earnings last week as it gained another revenue surge and ended its fiscal 2024 year on a high note. Its fourth quarter ended 28 January saw revenue reach $22.1bn, an increase of 22pc compared to the previous quarter and a 265pc increase compared to the same period last year.
The company’s earnings appeared incredibly strong across the board, with operating income reaching $13.6bn and net income reaching $12.28bn, a year-on-year increase of 983pc and 769pc respectively.
Founder and CEO Jensen Huang said accelerated computing and generative AI have “hit the tipping point”, with demand surging globally across “companies, industries and nations”.
“Our data centre platform is powered by increasingly diverse drivers – demand for data processing, training and inference from large cloud-service providers and GPU-specialised ones, as well as from enterprise software and consumer internet companies,” Huang said. “Vertical industries – led by auto, financial services and healthcare – are now at a multibillion-dollar level.”
Nvidia’s earnings soared throughout 2023. The company’s total revenue for last year was more than $60.9bn, an increase of 126pc compared to the previous year, while net income grew by 581pc in the same period.
It wasn’t all smooth sailing for the company last year. One of its offices was reportedly raided in October by French authorities due to suspected “anticompetitive practices”. In November, it was sued by automotive supplier Valeo for allegedly stealing its trade secrets.
Nvidia also faces stiff competition from other major Big Tech players. Microsoft, for instance, unveiled its own custom silicon chips last year that are designed for AI tasks. The software giant also overtook Apple as the world’s most valuable company a month ago.
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