Nvidia Corp jumped in late trading after giving a bullish revenue outlook for the current quarter, suggesting that a push into artificial intelligence (AI) processors is helping to offset sluggish demand for personal computer chips.
Sales in the three months ending in April are forecast to be about US$6.5 billion, the company said in a statement on Wednesday.
That compares with an average of analysts’ estimates of US$6.35 billion, data complied by Bloomberg showed.
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The forecast signals that Nvidia’s push into AI computing chips is paying off. Under CEO and cofounder Jensen Huang (黃仁勳), the company has parlayed its dominance of graphics processors into a strong position in the growing market for AI hardware.
Its chips excel at the kind of parallel processing that allows computers to make sense of large amounts of data and train software to make decisions.
Nvidia also announced its own AI cloud service on Wednesday.
The company is teaming up with Oracle Corp, Microsoft Corp and Alphabet Inc’s Google to offer the ability to use Nvidia GTX machines to conduct AI processing via simple browser access, Huang said.
The new platform, which will be carried by other cloud service providers, will help companies that do not have the technical expertise to build their own infrastructure.
The interest in ChatGPT has opened the eyes of business leaders to the power of artificial intelligence, Huang said.
However, Nvidia is focused on general-purpose software, while the value would come from tailoring it to companies’ own needs so they can improve their services and products, he said.
“It’s a wake-up moment for the capabilities of AI,” Huang said. “The challenge is that there is no such thing as one AI model for everyone. This is really where we can be of great value for the industry.”
Nvidia shares climbed as much as 9.1 percent after the report was released. They had earlier closed at US$207.54 in New York.
The shares have become the best performer in the Philadelphia Stock Exchange Semiconductor Index this year, gaining 42 percent.
Investors have piled into Nvidia — making it the world’s most valuable chipmaker again — as they bet that demand for AI systems such as ChatGPT would boost orders for the California-based company’s products.
Nvidia’s dependence on the PC market for a large chunk of sales dragged on its results last quarter, although not as much as expected. Computer manufacturers have been slashing chip orders in an attempt to work through stockpiles of unused inventory.
The company’s gaming business — heavily reliant on the PC industry — earned revenue of US$1.83 billion last quarter, a decline of 46 percent. Still, it topped an average estimate of US$1.6 billion.
Data-center sales grew 11 percent to US$3.62 billion, coming in short of an average prediction of US$3.86 billion.
Overall revenue fell 21 percent to US$6.05 billion, marking Nvidia’s second decline in 13 quarters. Profit was US$0.88 a share, minus certain items.
On that basis, analysts had predicted a profit of US$0.81 a share on sales of about US$6 billion.
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