A large portion of Nvidia's growth in the quarter was driven by data center revenues, which totaled $30.8 billion for the quarter, up 112 percent from last year. The company's gross profit margin was 74.5 percent, almost flat from a year ago. But analysts expect Nvidia's margins to shrink as the company shifts to producing more Blackwell chips, which cost more to make than their less advanced predecessors.
Nvidia's earnings report is seen as an important bellwether for the AI industry as a whole. Chip architects' advanced GPUs, which power complex neural network Processing is what has made the current generative AI boom possible. As Silicon Valley giants raced to create new chatbots and image-generation tools over the past few years, Nvidia's revenue exploded, allowing it to overtake Apple as the world's most valuable public company. Since the launch of ChatGPT in November 2022, Nvidia's share price has increased nearly tenfold.
Almost every major tech company is working on AI, even those Building your own processing unitsNvidia relies heavily on GPUs to train its AI models. For example, Meta has said it is building its latest AI technology on clusters more than this 100,000 Nvidia H100. Meanwhile, smaller AI startups are left without Sufficient AI computing power As Nvidia struggled to meet demand.
Blackwell, Nvidia's latest GPU, is made of two pieces of silicon, each about the same size as its previous chip, the hopper, which are combined together into a single component. This design has resulted in a chip that is reportedly four times as fast and more than twice as fast number of transistors As its predecessor.
But Blackwell's launch hasn't been smooth. Production of the new chip, originally scheduled to ship in the second quarter, was disrupted, reportedly delayed Rollout in a few months. Huang took responsibility for the problem and called it a “Design Flaw” Due to which “yield was reduced.” Huang told Reuters in August that Nvidia's longtime chipmaking partner, Taiwan Semiconductor Manufacturing Co Ltd, helped Nvidia fix the problem.
Moorhead told WIRED that he remains bullish on Nvidia and is confident that the generative AI market will continue to grow over the next 12 to 18 months, despite at least some recent reports There are suggestions that AI progress is beginning to plateau.
“I think the only way shareholders will have to revolt is if they are concerned about capital expenditures or the profitability of hyperscalers,” Moorhead said, referring to big tech companies like Amazon, Google, Microsoft and Meta. AI Cloud Services. “But I think they'll keep buying Nvidia until that day actually comes.” He said enterprise AI is still an area of growth for Nvidia.
On today's earnings call, Nvidia Chief Financial Officer Colette Kress said Nvidia's enterprise AI tools are “completely complete,” including an operating platform that lets other businesses build their own co-pilots and AI agents. Provides convenience. Customers include Salesforce, SAP and ServiceNow, he said.
Huang reiterated the same point later in the call: “We're starting to see enterprise adoption of agentic AI,” he said. “This really is the latest rage.”