Nvidia, the chip maker, faced growing concerns among investors ahead of its fiscal first-quarter results. There was a fear that major customers like Google, Amazon.com, and Microsoft would reduce orders for the latest AI systems in anticipation of a new line later this year. However, Nvidia’s report managed to ease these fears as revenue and earnings beat estimates.
The company previewed new systems named Blackwell at a conference two months ago, receiving great acclaim. Despite not shipping until later this year, demand for the current series of chips known as Hopper is expected to outstrip supply for some time. Nvidia’s largest customers have increased their capital spending forecasts to invest more in AI infrastructure.
Nvidia’s transformation over the past year has been remarkable, with annual revenue tripling to nearly $80 billion, driven by its data center segment. Data center revenue hit $22.6 billion in the latest quarter, more than five times its size a year ago. Wall Street expects annual data center revenue to exceed $100 billion in the next year.
Managing this growth will be a challenge for Nvidia, especially in meeting sky-high expectations. The company’s stock may be sensitive to competitor moves, but Nvidia’s established position in AI chips and software gives it a strong advantage. Despite potential challenges, Nvidia’s stock price surged 6% in after-hours trading, surpassing the $1,000 mark for the first time.