Home/ Markets / Stock Markets/  Nvidia share price spikes nearly 30% on AI boom, strong revenue growth forecast

Nvidia Corp., the world’s most valuable chipmaker, forecast July-quarter revenue more than 50% above Wall Street estimate driven by the artificial intelligence (AI) frenzy. Nvidia share price witnessed a sharp rally of as much as 28% after the bell to hit a record high of $391.50.

The share price rally boosted the stock value by around $200 billion to over $950 billion, extending the company's lead as the world's most valuable chipmaker and Wall Street's fifth-most-valuable company.

Nvidia said its sales in the three months ending in July will be about $11 billion. This was against an average analyst estimate of $7.18 billion. The company also said it is boosting supply to meet surging demand for its artificial-intelligence chips, which are used to power ChatGPT and many similar services.

The company’s adjusted revenue for the quarter ended April 30 was $7.19 billion as compared to analysts’ expectation of $6.52 billion, while net income rose to $2.04 billion, or 82 cents per share, from $1.62 billion, or 64 cents per share, a year earlier.

“We’re seeing incredible orders to retool the world’s data centers," Chief Executive Officer and co-founder Jensen Huang told analysts on a conference call. A trillion dollars of data center infrastructure will be upgraded to handle so-called accelerated computing, he said, letting them run generative AI tools such as ChatGPT.

Nvidia shares have outperformed stocks in the major indexes it trades on this year and its market value had swelled to $755 billion by Wednesday’s close. By that measure, the chipmaker is more than six times the size of Intel Corp., a company that had more than twice Nvidia’s annual revenue last year.

Nvidia’s forecast fuelled a rally in AI-related stocks. Its rival Advanced Micro Devices Inc. advanced 10% and Taiwan Semiconductor Manufacturing Co., which manufactures Nvidia’s chips, gained 8% in late US trading.

(With inputs from Agencies)

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Updated: 25 May 2023, 08:53 AM IST
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