Nvidia Corp’s forecast for surging revenue surprised even the most bullish analysts on Wall Street, propelling the chipmaker to the cusp of a US$1 trillion market capitalization and igniting a global jump in stocks linked to artificial intelligence (AI).
The Santa Clara, California-based company gained as much as 29 percent in extended US trading, on course for a record high, after saying it expects sales to reach about US$11 billion in the three months ending July.
That gain puts Nvidia on track also to rack up the biggest one-day valuation jump in US company history.
Photo: Reuters
Nvidia, the biggest supplier of the advanced chips required to train a new generation of AI services, inflamed already lofty expectations for a burgeoning technology.
Its rival chipmaker Advanced Micro Devices Inc jumped 10 percent, while its chip supplier, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), rose as much as 3.8 percent in Taipei and equipment supplier Advantest Corp surged as much as 20 percent to an all-time high in Tokyo.
ASML Holding NV, which supplies gear to TSMC, gained more than US$6 billion in early trading in Europe. Along with memorychip maker SK Hynix Inc, they collectively gained more than US$260 billion of value in a market otherwise preoccupied with concerns about the US debt limit and China’s economic slowdown.
Investors this year have doubled down on wagers that the viral success of OpenAI’s ChatGPT and other bots would usher in a new era of spending on the technology that underpins AI.
Nvidia’s chips excel at parallel processing, making them well-suited for training software by bombarding it with data.
The market exuberance drove home growing anticipation around the advent of next-generation AI, which executives around the world have variously likened to the emergence of the Internet and the iPhone.
Under chief executive officer and cofounder Jensen Huang (黃仁勳), Nvidia has positioned itself as the top provider of components for training AI software. That has helped it weather a broader slowdown in technology spending.
Investors were looking to Nvidia for evidence that the surge in interest in AI this year is resulting in higher sales of chips that provide the computing power.
The semiconductor manufacturer delivered that with a revenue forecast for the current quarter that dwarfed the average analyst estimate.
“The transformational surge in AI spending is paying off much earlier than expected,” Morgan Stanley analyst Joseph Moore wrote in a note.
“We simply have no historical precedent for the magnitude of this step function,” he said.
Huang said that the use of the technology is only in its infancy and more tailored products for specific industries are needed.
He has built online services and software tools to help encourage the broader adoption of AI outside of his big customers — cloud providers such as Microsoft Corp and Amazon.com Inc’s Amazon Web Services.
“Truly spectacular orders coming through for NVDA’s A100 and H100 AI chips,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Ltd in Singapore.
“More importantly for Asian equity investors, they point out that all the orders are being passed on to TSMC,” which has “more than adequate” capacity to fill the orders, Anvazadeh said.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
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