Nvidia's Revenue Doubles, Driven by AI Demand
Nvidia’s revenue has soared, doubling over the past year, thanks to the surging demand for generative AI. The Santa Clara-based AI chip giant reported a record revenue of $13.5 billion for the second quarter of its 2024 fiscal year, which ended on July 30.
This marks a 101 percent increase from the same period in the previous fiscal year and an 88 percent rise from the previous quarter.
Jensen Huang, Nvidia’s co-founder and CEO, attributes this growth to the high demand for the company’s powerful GPUs.
He explains that many companies are transitioning from CPU-powered data centers to GPU-accelerated ones, which significantly boost performance and efficiency. “The world is transitioning from general-purpose computing to accelerated computing,” Huang said during Nvidia’s earnings call.
Record-Breaking Revenue and Future Projections
- Nvidia surpassed Wall Street’s expectations by $2.4 billion.
- Earnings per share (EPS) were $2.70, beating analyst estimates by 61 cents.
- Nvidia projects third-quarter revenue of $16 billion, plus or minus 2%, representing a 169% increase from the same period last year.
- Despite the impressive year-over-year growth, the third quarter is expected to have a slower sequential growth rate.
- Nvidia's second-quarter growth was primarily driven by its data center business.
- Data center revenue increased 171% year-over-year, reaching $10.3 billion.
Nvidia CFO Colette Kress highlighted that cloud service providers and large consumer internet companies, such as Amazon Web Services, Google Cloud, Meta, Microsoft Azure, and Oracle Cloud, are major growth drivers, utilizing Nvidia’s HGX platform with H100 and A100 GPUs for generative AI applications.
Overcoming Supply Constraints
Nvidia has taken steps to address supply constraints for its popular H100 GPUs by developing and qualifying additional capacities and suppliers for key manufacturing processes. Kress assured that Nvidia's supply will continue to ramp up in the coming quarters, supported by these new capacities and the unveiling of the L40S GPU, a universal accelerator for AI and graphical workloads.
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The company is also building a significant software business, generating hundreds of millions annually from products like Nvidia AI Enterprise, which is now included with H100 PCIe card purchases.
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Nvidia’s gaming revenue rebounded in the second quarter, growing 22 percent year-over-year to nearly $2.4 billion, driven by demand for GeForce 40 Series GPUs.
However, professional visualization revenue declined 24 percent year-over-year to $379 million, despite a 28 percent sequential growth due to stronger enterprise workstation demand.
The automotive business saw a 15 percent year-over-year increase to $253 million, although it fell 15 percent from the previous quarter due to lower overall auto demand, particularly in China.
Decline in OEM and Cryptocurrency Mining Revenue
Nvidia did not comment on its OEM and other revenue, which includes Cryptocurrency Mining Processors. This segment saw a 53 percent year-over-year decline and a 14 percent drop from the previous quarter, totaling $66 million.
In summary, Nvidia’s remarkable revenue growth, driven by the high demand for generative AI, showcases the company’s successful transition to GPU-accelerated data centers and highlights the expanding role of AI in its business strategy.
