Single-quarter earnings of $6.7 billion! "AI money" all earned by NVIDIA

As of now, in this smoke-filled AI global competition, the biggest winner is neither Microsoft nor Google, but NVIDIA!

According to the financial report for the second quarter of fiscal year 2024 (the three months ending in July) released on Wednesday, NVIDIA's revenue in the second quarter reached $13.5 billion, as the unprecedented demand for generative AI chips offset the impact of the shrinking GPU demand in the computer market.

In the second quarter, NVIDIA's data center revenue reached a record-breaking $10.32 billion, more than doubling in just one quarter.

Benefiting from this, NVIDIA achieved a GAAP net profit of $6.19 billion in the second quarter, a year-on-year increase of 843%; on a non-GAAP basis, the net profit increased by 422% year-on-year, reaching an incredible $6.74 billion, more than any other company in the AI field.

NVIDIA's stock price rose more than 6% after hours, with a year-to-date increase of nearly 230%, currently trading at $471.16 per share.

In response to this, Chaim Siegel, an analyst at investment firm Elazar Advisors, released a report stating:

I believe that when I write this report next year, my (target price) will be very high on Wall Street, but my estimate still needs to be significantly raised.

He raised NVIDIA's target price to $1600, about three times higher than the current stock price, but he said, "I still think my numbers are too conservative."

He said this means that NVIDIA's earnings per share will increase 12 times in 2024.

NVIDIA expects revenue to reach $16 billion in the next quarter, marking another leap brought by AI. NVIDIA's CFO, Colette Kress, said during the earnings conference call:

We expect the sequential growth to be mainly driven by data centers.

NVIDIA's next-generation AI chip, GH200, will be launched in mid-2024, and the price has not been disclosed yet, so the demand for the next quarter will still be for existing AI chip products.

NVIDIA stated that it expects demand to remain high until next year and has ensured an increase in supply.

Kress stated:

As we shorten cycle times and collaborate with supply partners to increase capacity, our supply will continue to increase in the coming quarters. He added that the new L40 GPU from NVIDIA will help meet the growing demands of various types of workloads.

NVIDIA's performance stands in stark contrast to its customers - AI big model companies. The latter have invested heavily in AI hardware and built multimillion-dollar AI models, but have not yet succeeded in monetizing them.

Microsoft has always been a major customer of NVIDIA's H100 GPU. Whether it's their Azure cloud or their partnership with OpenAI, Microsoft has been increasing capital expenditures to build AI servers, with a positive "revenue signal" expected to appear next year.

In terms of consumer internet, Meta company stated that it expects to spend up to $30 billion on data centers this year, and may invest more in artificial intelligence next year. NVIDIA said on Wednesday that Meta has seen returns in the form of increased engagement.

In addition, some startup AI companies are heavily indebted due to the purchase of NVIDIA GPUs, hoping to rent them out for profit in the coming months.