Nvidia has reported quarterly earnings that comfortably exceeded Wall Street's expectations, extending its multi-year streak of outperformance amid growing concerns over the sustainability of the artificial intelligence boom. The chipmaker posted earnings of $1.62 per share, beating the $1.53 forecast, while quarterly revenue reached $68.13bn against a predicted $66.2bn.
The vast majority of Nvidia's revenue comes from its datacenter business, which grew 75% year-on-year to $62.3bn, driven by heavy investment in AI infrastructure by technology companies. The firm also recorded a total profit of $120bn for the fiscal year. Chief executive Jensen Huang said customers were “racing to invest in AI compute – the factories powering the AI industrial revolution and their future growth”.
Investors have grown more cautious in recent months about the scale of spending by big tech firms on AI, with shares in most of the so-called Magnificent Seven starting the year in decline. Nvidia's results have provided some reassurance, and its stock rose about 3% in after-hours trading before settling to a gain of less than 1%.
However, scrutiny of Nvidia's financial arrangements with AI companies has intensified. Its proposed $100bn investment in OpenAI was abandoned earlier this month, with reports suggesting a $30bn investment instead as OpenAI prepares for a public listing at a valuation of roughly $730bn. Huang said on the earnings call that the company was “close” to agreeing a partnership with OpenAI.
Huang has repeatedly dismissed fears that AI will replace workers, describing it as a job creator and a core part of future infrastructure. “In this new world of AI, compute equals revenues,” he said. His comments follow a week in which a speculative research note about AI-driven unemployment triggered a stock market sell-off.
