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Nvidia’s Q2 2024 Financials Show Record Revenue With Boom In AI Chip Sales

Nvidia CEO and founder Jenson Huang says, ‘A new computing era has begun… The race is on to adopt generative AI’

Chip maker and trillion-dollar behemoth Nvidia has shared its financial results for the second quarter fiscal 2024 – ending July 30th, 2023 – showing its sales have more than doubled, hitting a record high due to surging demand for AI chips. Nvidia’s stock went up by 6% after the company did better than expected in the second quarter and gave positive predictions for the next period.

The GPU manufacturer predicts it will make around $16 billion in the third quarter, which is more than the $12.61 billion expected. This means their sales in this quarter might increase by 170% compared to last year.

Nvidia’s net income skyrocketed to $6.19 billion, which is equal to $2.48 per share, up from $656 million, or 26 cents per share, a year ago. It expects sales to go up even more in the next quarter and plans to buy back $25 billion worth of its stock.

The company’s strong sales and forecast show how important its graphic chips (GPUs) are for the imminent boom of generative AI. These chips, like A100 and H100, are essential for creating and using AI applications like OpenAI’s ChatGPT, which can understand basic text questions, generate code and even provide conversational responses or images.

Nvidia reports that its income rose to more than $13.5 billion for the three months ending in June.

A new computing era

Jensen Huang, founder and CEO of NVIDIA says, “A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI.

“The world has something along the lines of about a trillion dollars worth of data centres installed, in the cloud, enterprise and otherwise,” said Huang during an earnings call. “That trillion dollars of data centres is in the process of transitioning into accelerated computing and generative AI.

“Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” said Huang.

Nvidia mentioned that its adjusted gross margin went up by 25.3 percentage points to 71.2%, thanks to the increase in lucrative data center sales.

Nvidia leading the AI charge?

The company’s gaming division which used to be its main focus, had its income go up by 22% compared to the previous year, reaching $2.49 billion, which is higher than the expected average of $2.38 billion.

Overall, Nvidia’s solid performance was driven by its data centre business which is currently focused on AI chips. This led to the company becoming the fifth publicly traded US firm to join the ‘Trillion dollar club” alongside other behemoths like Apple, Alphabet, Amazon and Microsoft.

The company was first known for creating some of the best computer chips for processing video game graphics. But with the rapid rise of generative AI, most applications now rely on Nvidia’s hardware. A recent report stated that the company now controls around 95% of the machine learning market.

Even OpenAI’s ChatGPT which creates human-like responses was trained using 10,000 of Nvidia’s graphic processing units merged in a supercomputer owned by Windows company Microsoft.

Written By

Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.

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