Nvidia Profits: Profits are rising, underlining its dominance in AI chips

SAN FRANCISCO (AP) – Nvidia on Wednesday topped Wall Street estimates as its profits soared, boosted by its chipmaking dominance that has made the company an icon of the artificial intelligence boom.

Its net income increased more than sevenfold from a year earlier, reaching $14.88 billion in the first quarter ended April 28 from $2.04 billion a year earlier. Revenue more than tripled, reaching $26.04 billion from $7.19 billion the previous year.

According to FactSet, the company reported earnings per share adjusted to exclude one-time items of $6.12, well above the $5.60 expected by Wall Street analysts. It also announced a 10-to-1 stock split, which it noted would make its shares more accessible to employees and investors.

It also increased its dividend to 10 cents per share from 4 cents.

Nvidia Corp. stock rose more than 4% in after-hours trading to $991.85. Over the last year, the company’s shares have increased by over 200%.

The Santa Clara, California-based company quickly developed a lead in the hardware and software needed to adapt its technology to AI applications, in part because founder and CEO Jensen Huang began pushing the company into what was then seen as a mid-tech state. baked over a decade ago. It also produces chips for games and cars.

The company currently boasts the third-largest market value on Wall Street, behind Microsoft and Apple.

“Nvidia is defying gravity once again,” Jacob Bourne, an analyst at Emarketer, said in the quarterly report. While many technology companies want to reduce their dependence on Nvidia, which has achieved a level of hardware dominance in artificial intelligence that rivals earlier computing pioneers such as Intel Corp., “they have not yet achieved that goal,” he added.

Demand for generative artificial intelligence systems that can create documents, create images and serve as increasingly realistic assistants fueled astronomical sales of Nvidia’s specialized AI chips last year. Tech giants Amazon, Google, Meta and Microsoft have signaled they will have to spend more in the coming months on the chips and data centers needed to train and run artificial intelligence systems.