Latest news with #JacobBourne
France 24
28-05-2025
- Business
- France 24
Nvidia earnings beat expectations despite US export controls
Nvidia said it made a profit of $18.8 billion on revenue of $44.1 billion, causing shares to rise nearly four percent in after-market trades. Nvidia in April notified regulators that it expected a $5.5 billion hit in the quarter due to a new US licensing requirement on the primary chip it can legally sell in China. US officials had told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the Silicon Valley company said in a Securities and Exchange Commission filing. The new licensing rule applies to Nvidia GPUs with bandwidth similar to that of the H20. The United States had already restricted exports to China of Nvidia's most sophisticated GPUs, tailored for powering top-end artificial intelligence models. Nvidia was told the licensing requirement on H20 chips would last indefinitely, it said in the filing. The new requirements resulted in Nvidia incurring a charge of $4.5 billion in the quarter, associated with H20 excess inventory and purchase obligations "as demand for H20 diminished," the chip-maker said in an earnings report. US export constraints stopped Nvidia from bringing in an additional $2.5 billion worth of H20 revenue in the quarter, according to the company. Nvidia chief executive Jensen Huang said demand for the company's technology for powering AI remains strong, and a new Blackwell NVL72 AI supercomputer referred to as a "thinking machine" is in full-scale production, "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation," Huang said. Hot demand Nvidia high-end GPUs (graphics processing units) are in hot demand from tech giants building data centers to power artificial intelligence. Nvidia said its data center division revenue in the quarter was $39.1 billion, up 10 percent from the same period a year earlier. The market had expected more from the unit, however. "Nvidia beat expectations again but in a market where maintaining this dominance is becoming more challenging," said Emarketer analyst Jacob Bourne. "The China export restrictions underscore the immediate pressure from geopolitical headwinds but Nvidia also faces mounting competitive pressure as rivals like AMD gain ground on cost-effectiveness metrics for certain AI workloads," said Emarketer analyst Jacob Bourne. Revenue in Nvidia's gaming chip business hit a record high of $3.8 billion, leaping 48 percent in a year-over-year comparison and eclipsing forecasts. The AI boom has propelled Nvidia's stock price, which has regained much of the ground lost in a steep sell-off in January triggered by the sudden success of DeepSeek. China's DeepSeek unveiled its R1 chatbot, which it claims can match the capacity of top US AI products for a fraction of their costs. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," analyst Bourne said of Nvidia. © 2025 AFP
Int'l Business Times
28-05-2025
- Business
- Int'l Business Times
Nvidia Earnings Beat Expectations Despite US Export Controls
Nvidia on Wednesday reported earnings that topped market expectations, with a $4.5 billion hit from US export controls being less than the Silicon Valley chip juggernaut had feared. Nvidia said it made a profit of $18.8 billion on revenue of $44.1 billion, causing shares to rise nearly four percent in after-market trades. Nvidia in April notified regulators that it expected a $5.5 billion hit in the quarter due to a new US licensing requirement on the primary chip it can legally sell in China. US officials had told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the Silicon Valley company said in a Securities and Exchange Commission filing. The new licensing rule applies to Nvidia GPUs with bandwidth similar to that of the H20. The United States had already restricted exports to China of Nvidia's most sophisticated GPUs, tailored for powering top-end artificial intelligence models. Nvidia was told the licensing requirement on H20 chips would last indefinitely, it said in the filing. The new requirements resulted in Nvidia incurring a charge of $4.5 billion in the quarter, associated with H20 excess inventory and purchase obligations "as demand for H20 diminished," the chip-maker said in an earnings report. US export constraints stopped Nvidia from bringing in an additional $2.5 billion worth of H20 revenue in the quarter, according to the company. Nvidia chief executive Jensen Huang said demand for the company's technology for powering AI remains strong, and a new Blackwell NVL72 AI supercomputer referred to as a "thinking machine" is in full-scale production, "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation," Huang said. Nvidia high-end GPUs (graphics processing units) are in hot demand from tech giants building data centers to power artificial intelligence. Nvidia said its data center division revenue in the quarter was $39.1 billion, up 10 percent from the same period a year earlier. The market had expected more from the unit, however. "Nvidia beat expectations again but in a market where maintaining this dominance is becoming more challenging," said Emarketer analyst Jacob Bourne. "The China export restrictions underscore the immediate pressure from geopolitical headwinds but Nvidia also faces mounting competitive pressure as rivals like AMD gain ground on cost-effectiveness metrics for certain AI workloads," said Emarketer analyst Jacob Bourne. Revenue in Nvidia's gaming chip business hit a record high of $3.8 billion, leaping 48 percent in a year-over-year comparison and eclipsing forecasts. The AI boom has propelled Nvidia's stock price, which has regained much of the ground lost in a steep sell-off in January triggered by the sudden success of DeepSeek. China's DeepSeek unveiled its R1 chatbot, which it claims can match the capacity of top US AI products for a fraction of their costs. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," analyst Bourne said of Nvidia. "This doesn't signal an end to Nvidia's dominance, but highlights that sustaining it will require navigating an increasingly complex landscape of geopolitical, competitive, and economic challenges."
Asharq Al-Awsat
27-02-2025
- Business
- Asharq Al-Awsat
Nvidia Earnings Offer Little Cheer for Tech Shares
Nvidia's quarterly outlook on Wednesday suggested demand from Microsoft, Amazon and other heavyweight tech companies racing to build out AI infrastructure remains robust, though the outcome failed to significantly quell fears of overspending in the booming industry. Shares of Nvidia edged down 0.18% in Frankfurt on Thursday, having fallen 1.5% in extended trade in New York on Wednesday after the dominant AI chipmaker forecast quarterly revenue above analysts' estimates. Microsoft, Amazon, Meta Platforms and Alphabet, among Nvidia's largest customers, were mostly unchanged. Shares of those companies, among the components of the so-called "Magnificent Seven", have delivered big returns as they raced to dominate emerging AI technology following the debut of ChatGPT in November 2022. More recently, most of those stocks have stumbled and investors have become more cautious, especially after China's DeepSeek said it achieved significant AI performance at low cost. While Nvidia delivered a 78% surge in quarterly revenue, it said its first-quarter margin would tighten to about 71% from 73.5%, lower than the 72.2% estimated by analysts, as it ramps production of its new flagship Blackwell AI chips. "Despite market jitters over DeepSeek's efficient model and early Blackwell deployment challenges, Nvidia's results reaffirm that it continues to lead the AI landscape," said Jacob Bourne, an analyst at eMarketer. "Competitors are making strides but frontier models require the kind of advanced computing resources that Nvidia provides." Still, the highly anticipated earnings report from Nvidia was met with lackluster response from technology companies in Asia on Thursday. Shares of Taiwan Semiconductor Manufacturing Co (TSMC), Nvidia's main supplier of chips, slipped 0.47%, while South Korean chipmakers Samsung Electronics and SK Hynix fell 0.18% and 1%, respectively. Tokyo's Nikkei technology sub-index was up 0.2%. "Nvidia's earnings came with much less volatility than expected. The absence of major surprises may have kept sentiment relatively calm," said Yeap Jun Rong, a market strategist at IG. LOSING SHINE The launch of low-cost AI models from DeepSeek last month raised fears of a pullback in spending on Nvidia's priciest AI chips and evaporated more than half a trillion dollars of its stock market value in a single day, a record on Wall Street. Adding to worries, an analyst report suggested Microsoft was scrapping some data center leases. The Magnificent Seven stocks have retreated from their late-2024 peaks and the group is in correction territory, with the Roundhill Magnificent Seven ETF down more than 11% from its December 17 closing high. Nvidia has routinely exceeded analyst estimates over the last two years, but the magnitude of its revenue beats has narrowed as it faces tough comparisons from strong growth a year ago. "DeepSeek rattled investors but given Nvidia's first-mover advantage and the huge infrastructure investment plans from tech giants like Meta, it's an indication that Nvidia's high-end chips will remain in demand," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Magnificent Seven stocks added roughly $11 trillion in market capitalization between the debut of ChatGPT in November 2022 and their combined peak in mid-December 2024, with Nvidia adding $2.7 trillion in market value, making it the world's second-most valuable company at $3.2 trillion. Nvidia's stock has surged around 1,800% in the last five years. Magnificent Seven stocks on average more than tripled in that time, while the benchmark S&P 500 has gained about 65%.
Zawya
27-02-2025
- Business
- Zawya
Nvidia: AI boom not dead yet
Nvidia's strong growth forecast for the first quarter on Wednesday signaled that booming demand for its artificial intelligence chips was intact, and the company said orders for its new Blackwell semiconductors were "amazing." The company's forecast helps allay doubts around a slowdown in spending on its hardware that emerged last month, following Chinese AI startup DeepSeek's claims that it had developed AI models rivaling Western counterparts at a fraction of their cost. Its shares rose, before declining slightly in choppy extended trading, after closing up 3.7% in regular trading. Nvidia is the biggest beneficiary of a rally in AI-linked stocks, with its shares up more than 400% over the last two years. CEO Jensen Huang struck an optimistic note saying "AI is advancing at light speed," and that "demand for Blackwell is amazing," in commentary that should bode well for AI-related stocks that have taken a hit in the past week. "We've successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter," he said. Nvidia is undergoing a critical product transition as it moves to a new chip architecture called Blackwell, shifting from selling individual chips to full AI computing systems that integrate graphic chips, processors and networking equipment. The Santa Clara, California-based company generated $11 billion of revenue from Blackwell-related products in the fourth quarter, roughly 50% of the company's overall data center revenue. The company expects total revenue of $43 billion, plus or minus 2% for the first quarter, compared with analysts' average estimate of $41.78 billion, according to LSEG. "Unlike previous quarters, there was heightened skepticism going into this report due to concerns about DeepSeek's efficient model and questions surrounding the Blackwell rollout," said eMarketer analyst Jacob Bourne. "But the results have removed the doubts." The Blackwell ramp-up has been complicated and costly, weighing on the company's margins, however. Nvidia on Wednesday forecast first-quarter gross margin slightly below expectations - it will sink to 71%, below the 72.2% forecast by Wall Street, according to data compiled by LSEG. Still, Nvidia's Chief Financial Officer Colette Kress said on a conference call that Nvidia would return to the mid-70% gross margin range later in the fiscal year as it further increased production of its Blackwell chips, lowering costs. The AI rally lost some of its steam last month after DeepSeek's sudden rise, resulting in Nvidia losing $593 billion in market value, the largest one-day loss for any U.S. company. Investors questioned whether demand for AI chips was sustainable and the enormous capital expenses promised by large U.S. tech companies including Microsoft. Microsoft has earmarked $80 billion for AI in its current fiscal year, while Meta Platforms has pledged as much as $65 billion. A recent brokerage report suggested that Microsoft has scrapped leases for sizable U.S. data center capacity, suggesting potential oversupply. But Reuters reported on Monday that Chinese companies are ramping up orders for Nvidia's H20 AI chip due to booming demand for DeepSeek's low-cost AI model. "Despite the breakthroughs from DeepSeek, Nvidia's momentum with Hyperscalers seems to continue," Third Bridge analyst Lucas Keh said, referring to large cloud-computing companies. In more positive news for Nvidia, CFO Kress said the Stargate data center project announced last month by U.S. President Donald Trump will use Nvidia's Spectrum X ethernet for networking. The ethernet products are included in the company's data center segment. Nvidia reported adjusted per-share profit of 89 cents, compared with estimates of 84 cents a share. Revenue for the fourth quarter grew 78% to $39.3 billion, beating estimates of $38.04 billion. Sales in the data-center segment, which accounts for most of Nvidia's revenue, grew 93% to $35.6 billion in the quarter ended January 26, above estimates of $33.59 billion. The segment had recorded growth of 112% in the prior quarter.
The Guardian
26-02-2025
- Business
- The Guardian
Nvidia to report first earnings since shock debut of Chinese AI DeepSeek
Nvidia will deliver its earnings report for the fourth quarter of 2024 Wednesday evening, which investors will be watching closely for any signs of slowing demand for semiconductor chips. The chipmaker's financials will face scrutiny over possible signals of an end to the AI-fueled market boom that has propelled the company to a stratospheric valuation of $3.1tn. Analysts expect Nvidia to maintain its leadership position as the maker of the AI industry's favorite chips, but recent news has presented new potential challenges to the company's ownership of the market. For one, analysts at TD Cowen published findings earlier in the week that Microsoft, one of Nvidia's biggest customers, was cancelling leases with private data center operators. Investors expressed concerns about the sustainability of mass investment into AI infrastructure, including Microsoft's $80bn, which would mean less spending on Nvidia's wares. This earnings call will also be the first look at the company's financials and demand since China's DeepSeek AI introduced an AI model that beat many of those made in the US while requiring a fraction of the training and investment. The introduction of DeepSeek initially sent Nvidia's valuation tumbling by hundreds of billions because the Chinese AI seemed to show that new models did not necessarily need to rely on Nvidia's most expensive, top-of-the-line graphics processing unit (GPU), as most cutting-edge models out of the US do. Sign up to TechScape A weekly dive in to how technology is shaping our lives after newsletter promotion Despite the company's past stellar performance, analysts expect investors to look for other signs that the company will be capable of meeting the moment as demand for the chips that power AI models remains steady. 'The key question for Nvidia's Q4 earnings isn't just about the numbers, but whether the company can maintain its commanding position as AI evolves,' said Jacob Bourne, a technology analyst at eMarketer. 'Even if Nvidia posts another quarter of stellar growth, the market reaction will depend on how well it can convince investors that it can tackle these challenges.' Some analysts predict the ripples from DeepSeek's launch may not have an immediate impact on Nvidia but could allow competitors like AMD and Intel to 'gain a foothold on the lower end of the AI infrastructure market', said Alvin Nguyen, a senior analyst at Forrester. 'DeepSeek has established a new and lower base of performance for generative AI (specifically for chain-of-thought/reasoning models), allowing for more organisations to experiment with AI,' Nguyen added.
