Hunger for Nvidia’s artificial intelligence (AI) chips has propelled its sales to $13.5bn (£10.6bn) in its second quarter, more than doubling from a year ago.
The American tech behemoth’s data centre business drove most of the sales, soaring 170 per cent compared to the same period last year, up to $10.3bn (£8.1bn).
Nvidia’s data centre business sells the company’s high performance processor designs, which are needed to build complex AI systems.
Jensen Huang, Nvidia chief executive, declared the dawn of a “new computing era” as companies shift towards accelerated computing and generative AI.
“Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” he said.
“The race is on to adopt generative AI.”
US based Nvidia forecasts an even better third quarter, expecting to amass $16bn in revenue.
Shares jumped 6.5 per cent in after-hours trading.
Nvidia has cemented its place alongside Apple, Microsoft, Alphabet, and Amazon in the exclusive “Trillion Dollar Club,” with a market value surpassing $1t this year.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said the $16bn forecast for the next quarter is “streets away from analyst expectations and reflects the seemingly insatiable appetite for Nvidia’s products, which are the leading option for creating AI tools like ChatGPT.”
“Being an early beneficiary of a megatrend like AI is an enviable and rare opportunity, but bears will be arguing that at some point the valuation will start to appear full,” she added.
Ben Barringer, equity research analyst at Quilter Cheviot said Nvidia is more than just a chips business.
In addition, it “provides all the software and networking around them to ensure they talk to each other and provide customers with seamless technology.”
Barringer said Nvidia is “getting well ahead” of its rivals such as AMD, which has a similar networking service to Nvidia on the way.
“But Nvidia is doing it in the here and now.”