Nvidia caused a stir when it announced its Q2 results, reflecting a record revenue of $13.51bn, which constituted staggering increases of 88% from Q1 and 101% from last year. This impressive performance, which beats analysts forecasts by billions, rides on the coattails of a lingering AI frenzy that fuels demand for microchips.
Nvidia’s $25bn stock buyback increases AI heat
The global leader in AI computing also indicated that it would buy back $25bn in stock, which sent Nvidia shares skyrocketing in a matter of hours. The company’s share price closed at $471.16 on Wednesday, up +3.17% from the previous day’s close. It spiked even more after the bell rang, hitting a record 9.6% increase in trading.
Nvidia’s products remain in high demand as AI technologies mimicking human-like reading and writing continue to make an impact worldwide. Powered mostly by Nvidia chips, these innovations boost the company’s profits.
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Jensen Huang Source: Reuters
Experts estimate the Nvidia market monopoly will reign for several more quarters as the AI chip supply exceeds demand by roughly 50%. Chief Executive of Nvidia, Jensen Huang, commented:
Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI.
Despite the chip buzz, analysts point out that it was the company’s overall AI offerings that amplified its Q2 bottom line. Nvidia creates complete AI machines with memory chips and parts from other suppliers.
But facts remain, everything from big tech companies such as Microsoft to AI startups are clambering to get Nvidia chips. Furthermore, studies show that China is stockpiling Nvidia chips through rush orders before US export restrictions take effect. This all adds to accumulating a healthy Nvidia financial profile.
