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NVIDIA has announced its financial results for the period of February to April 2023, revealing a remarkable 26% year-on-year increase in net profit, reaching $2.043 billion (approximately ¥280 billion), significantly surpassing market predictions. This achievement is particularly noteworthy considering the decline in revenue from gaming GPUs (graphics processing units). The growth can be attributed to the robust performance of high-profit AI semiconductors used in generating artificial intelligence, including the newly introduced “H100” series GPUs for AI learning and inference. The positive trend extends to the projected revenue for the May-July period, exceeding market expectations by nearly 50%, leading to a substantial after-hours trading surge of approximately 28% in stock prices.
Overview of Financial Results and Revenue Trends
The financial results for NVIDIA’s February-April 2023 period were exceptionally robust, with a 26% increase in net profit to $2.043 billion, despite a decline in revenue from gaming GPUs. The substantial growth was primarily driven by the surge in demand for semiconductors tailored for AI applications, notably the success of the newly introduced “H100” series. NVIDIA not only recovered from the previous downturn but also exceeded market predictions, showcasing a significant achievement in net profit.
Driving Force of the AI Market
The recovery in NVIDIA’s performance is significantly attributed to the thriving AI market. The AI boom has led major tech giants such as Google and Microsoft to invest heavily in AI-driven service development, triggering a semiconductor procurement race. Technologies like the conversational AI “Chat GPT” have garnered attention, confirming the steady pace of corporate investments in AI-related ventures. NVIDIA has strategically positioned itself in the forefront of the burgeoning AI market, meeting market expectations through the introduction of innovative products.
Increased Supply and Growth in the Data Center Segment
During the earnings briefing, CEO Jensen Huang emphasized the substantial increase in supply to meet the surging demand. This supply expansion contributed significantly to NVIDIA’s success. The revenue from the Data Center segment, including AI semiconductors, witnessed a remarkable 14% increase, reaching $4.284 billion. This growth has surpassed the previously dominant gaming-related revenue. Despite some companies exercising caution in data center investments due to macroeconomic uncertainties, AI-related investments have remained robust, fostering the successful growth of NVIDIA’s Data Center segment.
Challenges in the Gaming Segment and the Impact of COVID-19
Conversely, the gaming segment experienced a 38% decline in revenue, reflecting the ongoing repercussions of the COVID-19 pandemic on consumer behavior. The earlier surge in demand for gaming-related products during the pandemic has subsided. However, with the introduction of new products, the gaming segment has shown signs of recovery, presenting a positive trend in the last quarter.
Future Outlook and Stock Price Trends
NVIDIA is anticipated to continue leading the growth in the AI market and the Data Center segment, further fueling expectations of a rise in stock prices. The May-July revenue projections, surpassing market expectations by nearly 50%, have propelled the stock prices to a notable 28% increase in after-hours trading. The ongoing evolution of AI technology and strategic product introductions aligning with market needs contribute to NVIDIA’s stable financial performance, instilling confidence in future growth prospects. NVIDIA remains committed to strengthening technological innovation and market leadership, actively pursuing opportunities for sustained growth.
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