May 26, 2023
At a Glance
- Nvidia's market value is approaching $1 trillion, as shares soared after its 2024 revenue forecast blew past expectations.
- CEO Jensen Huang credits two simultaneous trends as driving demand: the shift to accelerated computing and generative AI.
- Nvidia's entire data center product line will ramp up production due to 'surging' demand.
Nvidia shares are up 27% over two days following a bullish revenue forecast that could soon catapult the chipmaker into the rarefied club of companies worth $1 trillion or more.
The maker of GPUs used for processing heavy AI workloads reported a 2024 revenue forecast of $11 billion, which exceeded what Wall Street analysts expected by 53%, according to figures from MarketWatch.
At the close of trading on Friday, Nvidia’s market capitalization, or market value, was at $963.2 billion. The stock ended the day at $389.46 on 54% higher volume than the daily average. The trailing 12-month price-to-earnings ratio is 223.8.
Nvidia disclosed its revenue forecast in its first-quarter earnings report, announced on May 24.
CEO Jensen Huang said due to "surging" demand, his company is “significantly” ramping up chip manufacturing across its entire suite of products for the data center.
“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” he said.
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Huang said global data centers are undergoing a transition to prepare for this new computing era. They are moving from general purpose centers to accelerated computing. This is to serve enterprise customers that are looking to integrate generative AI “into every product, service and business process,” he said.
Nvidia’ entire data center product family — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production.
“We are significantly increasing our supply to meet surging demand for them,” Huang said.
Read more about:ChatGPT / Generative AI
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