When Nvidia (NVDA), a graphics card supplier, posted an over 20% year-on-year drop in revenue, the stock rallied. NVDA stock rose from $209 to around $237 after the report. The company turned its investor attention to the sequential growth of 2%, stock buyback, and cash dividends.
The generative AI supercomputer is the biggest highlight of the press release.
Nvidia said that customers may engage the NVIDIA AI. This is a supercomputer of acceleration libraries software or pre-trained generative AI models as a cloud service. In practice, customers may access the Nvidia DGX AI supercomputer from a browser.
Markets continued to buy up any companies that mentioned AI. Microsoft’s ChatGPT started a euphoria of investor interest in the technology.
Nvidia’s H100 data center GPU will offer customers exceptional performance. Customers who train their AI models will have up to 30 times faster than the A100.
Outlook
Nvidia is forecasting a big increase in adjusted operating expenses of around $1.78 billion. An adjusted gross margin of 66.5% suggests a healthy GPU market overall. Despite crypto mining volumes falling last year and an oversupply in last-generation gaming graphics cards, Nvidia expects strength in the sector.
Cash-strapped gamers unable to afford the latest GPU offering should not expect prices discounted anytime soon. This will sustain Nvidia’s profitability in 2023.
