Being the most valuable company in the world doesn’t matter
The impact of AI has been evident at Nvidia. Its share price has risen by around 600% since the start of 2023 and it has climbed into the top three most valuable companies in the world, alongside Apple and Microsoft.
In June, it briefly became the world’s most valuable public company, but in the following seven weeks it lost nearly 30% of its value. However, it is now in the midst of a stock rally, largely due to the optimistic outlook of firms such as Goldman Sachs and Bank of America, which reiterated their buy ratings for the firm.
“We are not concerned about being one, two or three. Many companies have announced their own GPUs and as the pioneer in this field our focus is on developing new technologies to stay ahead of the competition,” says the executive. “That position does not change anything for the more than 40,000 companies that depend on our technologies.”
It is worth noting that during the second quarter of the year, the data center area of Nvidia’s Enterprise division obtained revenues of 26.3 billion dollars, which represents an increase of 154% compared to the previous year and 16% compared to the previous quarter.
On the other hand, Nvidia’s direct competitors have not performed as well as Nvidia. Intel reported its earnings at the beginning of the month and although its revenues were $24 billion, its outlook was “more difficult” than expected, while AMD reported $5.84 billion in revenues.
Blackwell and the future of the company
Another element that impacted Nvidia earlier this month was a design flaw in its next-generation AI chip, Blackwell, which caused a delay in its launch. However, the outlook within the company is hopeful. “Demand for Blackwell has dried up,” says Aguiar.
According to Jensen Huang, shipments of this next-generation chip will begin in the fourth quarter of this year, and the previous GPU, called Hopper, will also be important to maintain demand from enterprise customers.
“In the fourth quarter, we expect to generate several billion dollars in revenue from Blackwell,” said Nvidia CFO Colette Kress, while confidence is also high for the next quarter.
Nvidia is forecast to grow 16% in Q3 on the back of strong demand for Hopper, which will continue for the next two quarters, while for the financial year ending February 2025, the company expects 100% year-over-year growth and revenue of $120 billion.
“It is not an ambitious goal,” Aguiar concludes, as he believes it is in line with the company’s constant growth in recent months. “The market is insatiable, but what is promised is fulfilled.”
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