Shares of Nvidia, already one of the world's most valuable companies, skyrocketed Thursday after the chipmaker forecast a huge jump in revenue, signaling how vastly the broadening use of artificial intelligence could reshape the tech sector.
The California company is close to joining the exclusive club of $1 trillion companies like Alphabet, Apple and Microsoft, after shares jumped 25% in early trading.
Late Wednesday the maker of graphics chips for gaming and artificial intelligence reported a quarterly profit of more than $2 billion and revenue of $7 billion, both exceeding Wall Street expectations.
Yet its projections for sales of $11 billion this quarter is what caught Wall Street off guard. It's a 64% jump from last year during the same period, and well above the $7.2 billion industry analysts were forecasting.
"It looks like the new gold rush is upon us, and NVIDIA is selling all the picks and shovels," Susquehanna Financial Group's Christopher Rolland and Matt Myers wrote Thursday.
Chipmakers around the globe were pulled along. Shares of Taiwan Semiconductor rose 3.5%, while South Korea's SK Hynix gained 5%. ASML based in the Netherlands added 4.8%.
Nvidia founder and CEO of Jensen Huang said the world's data centers are in need of a makeover given the transformation that will come with AI technology.
"The world's $1 trillion data center is nearly populated entirely by (central processing units) today," Huang said. "And $1 trillion, $250 billion a year, it's growing of course but over the last four years, call it $1 trillion worth of infrastructure installed, and it's all completely based on CPUs and dumb NICs. It's basically unaccelerated."
AI chips are designed to perform artificial intelligence tasks faster and more efficently. While general-purpose chips like CPUs can also be used for simpler AI tasks, they're "becoming less and less useful as AI advances," a 2020 report from Georgetown University's Center for Security and Emerging Technology notes.
"Because of their unique features, AI chips are tens or even thousands of times faster and more efficient than CPUs for training and inference of AI algorithms," the report adds, noting that AI chips can also be more cost-effective than CPUs due to their greater efficiency.
Analysts say Nvidia could be an early look at how AI may reshape the tech sector.
"Last night Nvidia gave jaw dropping robust guidance that will be heard around the world and shows the historical demand for AI happening now in the enterprise and consumer landscape," Wedbush's Dan Ives wrote. "For any investor calling this an AI bubble… we would point them to this Nvidia quarter and especially guidance which cements our bullish thesis around AI and speaks to the 4th Industrial Revolution now on the doorstep with AI."
“Heretic” and “Maria” Set As Red Carpet Premieres At AFI Fest
The American Film Institute (AFI) has announced that Heretic, the psychological thriller starring Hugh Grant, and Maria, based on the life of opera singer Maria Callas starring Angelina Jolie, will round out the Red Carpet Premieres section at this year’s AFI Fest. The Heretic Gala Screening will take place on Thursday, October 24, and the Maria Gala Screening will be held on Saturday, October 26. The complete Red Carpet Premieres section includes the world premieres of Music By John Williams, Robert Zemeckis’ Here, Wallace & Gromit: Vengeance Most Fowl and Clint Eastwood’s Juror #2. All Red Carpet Premieres will take place at the historic TCL Chinese Theatre. The full lineup for AFI Fest 2024 will be unveiled on October 1.
“At the heart of AFI Fest is an unwavering dedication to celebrating the best in global cinema--together,” said Bob Gazzale, AFI president and CEO. “We look forward to uniting artists and audiences once again to be inspired by the art form in a powerful sense of community.”
Heretic follows two young missionaries (Sophie Thatcher and Chloe East) who are forced to prove their faith when they knock on the wrong door and are greeted by a diabolical Mr. Reed (portrayed by Grant), becoming ensnared in his deadly game of cat-and-mouse. The film is directed by Scott Beck and Bryan Woods and produced by Stacey Sher, Beck, Woods, Julia Glausi and Jeanette Volturno. The film will be released nationwide by A24 on November 8.
Directed by Pablo Larraín, Maria presents a tumultuous and beautiful depiction of one of the world’s most renowned artists and reimagines the legendary soprano in her final days in Paris, as Callas (Jolie)... Read More