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Nvidia Shares Soar 24% As Sales Forecast Jumps and AI Booms

Reuters2023-05-24

Nvidia Corp on Wednesday forecast second-quarter revenue more than 50% above Wall Street estimates, with the company saying it is boosting supply to meet surging demand for its artificial-intelligence chips, which are used to power ChatGPT and many similar services.

Shares of Nvidia, the world's most valuable listed semiconductor company, rocketed 24% after the bell to trade at $378.38, their highest level ever. That increased its stock market value by about $200 billion to over $950 billion, extending the Silicon Valley company's lead as the world's most valuable chipmaker and Wall Street's fifth-most valuable company.

The artificial-intelligence boom has helped Nvidia become the fifth-most valuable U.S. company by market value.

Nvidia has strained to meet demand for its AI chips, with Tesla Inc Chief Executive Officer Elon Musk, who is reportedly building out an artificial-intelligence startup, earlier this week telling an interviewer that the graphics processing units (GPUs) are "considerably harder to get than drugs."

But Nvidia Chief Executive Officer Jensen Huang on Wednesday said in a statement that the company is "significantly increasing our supply to meet surging demand" for its data center chips.

Analysts believe Nvidia reallocated some supply-chain capacity away from the slumping PC gaming market to its data center AI chips. Its PC gaming chips sell for as much as $1,500 while its AI chips fetch more than ten times that at about $20,000 each.

Nvidia forecast current-quarter revenue of $11 billion, plus or minus 2%. Analysts polled by Refinitiv are expecting revenue of $7.15 billion.

"Given the generative AI gold rush taking place, this should fuel demand for Nvidia's chips for the remainder of the year," said Edward Jones analyst Logan Purk.

Nvidia did not provide a full-year forecast on Wednesday, but Chief Financial Officer Colette Kress said the company had procured "substantially higher supply" for the second half of the year.

Adjusted revenue for the quarter ended April 30 was $7.19 billion. Analysts polled by Refinitiv were expecting revenue of $6.52 billion. The company's data center chip sales hit $4.28 billion, beating analyst estimates of $3.89 billion, according to segment data from FactSet.

Gaming chip revenue beat Wall Street expectations at $2.24 billion versus estimates of $1.97 billion, according to FactSet data.

Net income rose to $2.04 billion, or 82 cents per share, from $1.62 billion, or 64 cents per share, a year earlier. Excluding items, the company earned $1.09 per share in the first quarter, beating estimates of 92 cents.

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Comment（6）

  • YuTC968
    ·2023-05-25
    Sell Tesla and buy Nvidia...am thinking 😅😅
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  • SmartHunter
    ·2023-05-25
    Gg sold my nvda shares too quickly
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  • runningjames
    ·2023-05-24
    Wow!
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  • N00b
    ·2023-05-24
    to the moon!!!
    Reply
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  • CYKuan
    ·2023-05-24
    Great[Cool] 
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  • Andrewinho
    ·2023-05-24
    Great!! 👏👏👏🚀🚀🚀
    Reply
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  • 02:35

    Oversea-Chinese Banking Corporation (OCBC) chairman Andrew Lee has rejected a suggestion carried in The Business Times last month that the bank should sell its Chulia Street headquarters to “rejuvenate” the central business district.Responding to a shareholder’s question about the opinion article, which recommended that the bank sell its trio of buildings “for a handsome profit”, Lee says: “Categorically, we are not picking up the suggestion.”Speaking at OCBC’s 88th annual general meeting on April 17, Lee says the buildings are important to the organisation, and they also have historical value; OCBC Centre at 65 Chulia Street was the late architect I. M. Pei’s first big project in Singapore. Standing at 197.7m, it was Southeast Asia’s tallest skyscraper when it was completed in 1976.Aside from OCBC Centre, the complex also comprises the seven-storey OCBC Centre South at 18 Church Street and the 15-storey OCBC Centre East at 63 Chulia Street.While the OCBC Centre sits on freehold land, the “two ancillary buildings”, as Lee calls them, are located on leasehold land with 42 years remaining. “Over time, of course, we have to top up the lease, but we still have time; we still have 40 over years left,” says Lee. The questions come after an apparent U-turn by management sometime in the previous year. OCBC announced in a bourse filing on April 3, 2024 it was “exploring the redevelopment” of the trio of buildings. Less than a year later, however, CEO Helen Wong said the plans had been “deferred”.Speaking on Feb 26 at the release of the bank's results for FY2024 ended Dec 31, 2024, Wong said that after “further assessment”, management had decided to “delay that planning for a while” with “no exact timetable” ahead. “We explored it and we came to a conclusion: We still have a very iconic building here. Our buildings, our presence [and] our use of it [are] still very important to us, and we [have] now decided that we can delay that for a while.”According to Lee, OCBC’s board of directors ordered a study two years ago on possible redevelopment options for the buildings. “It’s the duty of the board to look at all major assets, where things are, where things can be improved. So, two years ago, yes, we told management: ‘Let’s see what can be done to the surrounding land where the two leasehold buildings are located.’”In addition to the study, Lee says management even contacted “some notable architects” to suggest designs for consideration. Lee thinks it is not the right time to undertake such a redevelopment, which can amount to “something like $4 billion to $5 billion” after accounting for lease top-ups and construction. He adds that such a decision will “strain the balance sheet of the bank”. Notably, Lee adds that “nowhere in the exercise was a suggestion that we sell the building”. “So, I don’t know where that report came [from] or where the idea came from,” he adds, referring to the March 31 opinion article. As the “oldest continuing bank in Singapore”, an institution like OCBC “must have a place”, says Lee, calling the Chulia Street headquarters the group’s “anchor”. “You can’t buy and sell everything.”Lee notes that aside from the trio of buildings, OCBC also owns the Bank of Singapore Centre at 63 Market Street and Great Eastern Centre at 1 Pickering Street. “As a group, we own quite a few buildings in town,” he adds. Further northeast, OCBC announced in September 2024 its $500 million investment into Punggol Digital District for the 430,000 sq ft OCBC Punggol. When completed in 1Q2027, it will become the bank’s second-largest office premises after its head office in Chulia Street.Up to 4,000 OCBC employees — mostly tech staff — will be housed across eight floors of a 12-storey mixed-use tower. OCBC will occupy the fourth to 11th levels of the tower, and fit-out works are expected to be completed in early 2027.

  • 02:32

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  • 02:28

    CGS International analysts Tay Wee Kuang and Lim Siew Khee have lowered their target price on United Overseas Bank (UOB) to $38.80 from $43 after the bank is likely to see lower earnings in FY2025, FY2026 and FY2027. Tay is taking over coverage from analyst Andrea Choong.In their report dated April 18, Tay and Lim have lowered their earnings per share (EPS) estimates for all three years by 6%, 3.7% and 4%, respectively.While the analysts believe UOB’s 1QFY2025 ended March 31 results may be supported by its previous FY2025 guidance, they see that the bank may report softer loan growth and non-interest income growth amid volatile macroeconomic conditions for the rest of FY2025.

  • 02:28

    Azalea Investment Management - First Closing at US$262 Million for Altrium Private Equity Fund Iii

  • 02:25

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