Nvidia’s First-Quarter Report for Fiscal 2024: Positive Outlook and Strong Growth in Data Center and Gaming Businesses

Nvidia, the leading graphics chip specialist, has released its first-quarter report for fiscal 2024, and the outlook is positive.[0] The company forecasts revenue of $11 billion for the current quarter, up 64% year over year, which is significantly higher than Wall Street's guidance of $7.2 billion.[0] Nvidia expects non-GAAP gross margin of 70%, plus or minus 50 basis points for the quarter. The strong guidance indicates that the light at the end of the tunnel is approaching, and the market seems to be aware of this fact, with Nvidia's shares up by 27.71% at the time of publishing.[0]

Jensen Huang, founder and CEO of Nvidia, believes that the computer industry is going through two simultaneous transitions – accelerated computing and generative AI. He stated that a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service, and business process. The company's data center segment, which includes semiconductors used in data centers, AI applications, and cloud computing, carried the day, ringing in record revenue of $4.28 billion, up 14% year over year and 18% sequentially.

Nvidia's gaming division, its second-largest revenue driver, contributed just over 30% to total sales last quarter, and its revenue figure amounted to approximately $2.2 billion, down 38% year over year but growing 22% sequentially.[0] The company launched the GeForce RTX 4070 GPU, which enables DLSS 3, real-time ray-tracing, and the ability to run most modern games at over 100 frames per second at 1440p resolution.[0] Furthermore, an additional 36 gaming titles featuring DLSS technology were incorporated, increasing the overall count of games and applications to 300.[0] And Nvidia expanded GeForce Now's game titles to more than 1,600.[0]

Nvidia's AI chips are widely used in training large language models and running machine learning software, and the company is expected to be the main supplier to the vast chatbot industry.[0] Nvidia has partnered with Microsoft and Dell Technologies for AI technology, and investors are enthusiastic about its critical role in the burgeoning artificial intelligence field. The company's long-term bullish outlook reflects positive momentum in the data center and gaming businesses and its dominant position in the AI space.[0]

0. “Nvidia Stock Goes Parabolic After Chipmaker Reports Q1 Beat: AI Momentum Pushes Data Center Revenue To Re” Benzinga, 24 May. 2023, https://www.benzinga.com/analyst-ratings/analyst-color/23/05/32563354/nvidia-stock-goes-parabolic-after-chipmaker-reports-q1-beat-ai-momentum-pushes-data

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