Nvidia has led the artificial intelligence boom to become one of the stock market’s biggest companies, as tech giants continue to spend heavily on the company’s chips and data centers needed to train and operate their AI systems. The company is now worth over $3 trillion, with its dominance as a chipmaker cementing Nvidia’s place as the poster child of the AI industry ahead of the release of its latest financial results Wednesday.
Quick Read
- All eyes are on Nvidia as it prepares to release its earnings, with Wall Street anticipating a strong performance due to its leading role in the artificial intelligence boom.
- Nvidia, now valued at over $3 trillion, has become a key player in the AI industry, with its chips and data centers being essential for training and operating AI systems.
- The company is expected to report second-quarter adjusted earnings of 65 cents per share on revenue of $28.74 billion, more than double its earnings from the same period last year.
- Nvidia’s revenue has more than tripled in the past three quarters, driven primarily by its data center business, fueled by the demand for generative AI products.
- Investors will be closely watching for any signs that demand for AI may be slowing, which could impact Nvidia’s growth trajectory.
- Nvidia’s dominance in AI applications is largely attributed to the strategic decisions of its founder and CEO, Jensen Huang, particularly his early bet on the chip technology that now drives the industry.
- The company will release its quarterly earnings after the market closes on Wednesday.
The Associated Press has the story:
All eyes are on Nvidia as it prepares to report its earnings. Here’s what to expect
Newslooks- (AP)
Nvidia has led the artificial intelligence boom to become one of the stock market’s biggest companies, as tech giants continue to spend heavily on the company’s chips and data centers needed to train and operate their AI systems. The company is now worth over $3 trillion, with its dominance as a chipmaker cementing Nvidia’s place as the poster child of the AI industry ahead of the release of its latest financial results Wednesday.
Wall Street expects the company to report second-quarter adjusted earnings of 65 cents per share on revenue of $28.74 billion, more than double what it earned in the comparable quarter one year ago, according to FactSet. In the past three quarters, revenue has more than tripled on an annual basis, with the vast majority of growth coming from the data center business.
The problem, critics say, is such stellar growth has set off too much euphoria among investors. Through the year’s first six months, Nvidia’s stock soared nearly 150%. At that point, the stock was trading at a little more than 100 times the company’s earnings over the prior 12 months. That’s much more expensive than it’s been historically and than the S&P 500 in general. That’s why analysts warn of a selloff if Wall Street sees any indication that AI demand is waning.
Demand for generative AI products that can compose documents, make images and serve as personal assistants has fueled sales of Nvidia’s specialized chips over the last year, but Wall Street is also looking for any indication that AI demand is waning.
The Santa Clara, California-based company carved out an early lead in AI applications race, in part because of founder and CEO Jensen Huang’s successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia’s invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday.
