Nvidia’s data centre business has witnessed a staggering 427% growth in the latest quarter. This remarkable expansion underscores the company’s pivotal role in powering modern data centres, which are integral to the operations of major cloud providers. Key clients like Amazon Web Services, Microsoft Azure, Google Cloud, and also Oracle Cloud heavily rely on Nvidia’s cutting-edge technologies to enhance their cloud infrastructure and services.
In the April quarter, Nvidia’s data centre sales soared to an impressive $22.56 billion. Cloud providers accounted for a substantial share, contributing to the mid-40% range of these revenues. This surge in revenue underscores the rising demand for GPUs. Furthermore, the cloud computing sector is rapidly expanding. As businesses increasingly shift to cloud-based solutions, this trend continues.
Startups leverage Nvidia’s GPUs by installing them in server racks, loading them in data centres, and renting them out to customers hourly. This innovative business model attracts significant investment, as customers spending billions on chips are anticipated to generate substantial returns from AI applications. Moreover, the strong and sustainable return on investment signals that the AI boom is poised to extend beyond its early stages, with companies planning long-term AI projects.
CEO Jensen Huang has highlighted a roster of key customers, including OpenAI, Google, Anthropic, and approximately 20,000 generative AI startups. Meta also declared its intention to invest billions in acquiring 350,000 Nvidia chips. Moreover, Meta expects to monetise this investment through its advertising business or by integrating a chatbot into its apps, demonstrating the wide-ranging applications of Nvidia’s technology.
The upcoming GPU codenamed Blackwell, is set to be available in the fiscal fourth quarter. Initial customers include industry giants such as Amazon, Google, Meta, Microsoft, OpenAI, Oracle, Tesla, and Elon Musk’s company xAI. The anticipation surrounding Blackwell indicates strong market confidence in Nvidia’s continued innovation and leadership in GPU technology.
Nvidia’s share price experienced a 6% jump, surpassing the $1,000 mark for the first time. This milestone reflects investor optimism and the company’s robust market performance. Additionally, Nvidia announced a 10-for-1 stock split, further emphasising its extraordinary growth trajectory, with a 25-fold surge in share price over the past five years.
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