How Nvidia turned AI demand into a $35.1 billion windfall

Nvidia reported nearly doubled revenue of $35.1 billion for the quarter ending October 31, 2024, driven by soaring demand for its AI semiconductors. This marks a 94% increase compared to the same period last year, positioning Nvidia as a leader in artificial intelligence technology.

Nvidia’s data center business significantly contributed to the company’s success, generating $30.8 billion in revenue—a 112% year-over-year increase. The company anticipates revenue for the current quarter, ending January 2025, to reach approximately $37.5 billion, which could vary by 2%. After exceeding Wall Street’s expectations for both sales and earnings, Nvidia’s third-quarter report showcased continued rapid growth amid a rising global AI market.

The company’s market value reached $3.579 trillion, surpassing Apple’s market cap of $3.461 trillion and placing Nvidia atop the S&P 500. With a staggering 195% stock increase this year, an investment of $100,000 made two years ago would be worth over $950,000 today. Nvidia’s performance accounted for about 25% of the gains in the S&P 500 as of October 31, and it has recently replaced Intel in the Dow Jones Industrial Average.

Analysts project Nvidia’s revenue will rise to $126.5 billion for the fiscal year ending January 2025, significantly more than four times its earnings two years ago. The anticipated performance is further fueled by Nvidia’s upcoming AI chip, Blackwell, which is expected to sustain this accelerated growth rate as demand for AI solutions remains strong.

The introduction of Blackwell is anticipated to drive substantial revenue in the fourth quarter, with Nvidia’s Chief Financial Officer Colette Kress noting that 13,000 samples have already been shipped to key customers. Significant investments from companies such as Microsoft, Oracle, and OpenAI in Nvidia’s technology underscore the burgeoning market for AI applications. While the demand for Blackwell is high, Kress highlighted that supply constraints might occur in fiscal 2026.

Cooling issues won’t halt Blackwell AI chip sales, Nvidia claims

In addition to data centers, Nvidia reported $3.28 billion in revenue from its gaming division, surpassing expectations of $3.03 billion. The increase in gaming revenue is attributed to higher demand for graphics processing units (GPUs) for PCs, laptops, and game consoles, including the Nintendo Switch. However, both Hopper and Blackwell systems face supply constraints, which could limit growth given the rising demand.

Nvidia’s automotive and professional visualization sectors generated $449 million and $486 million in sales, respectively, showcasing growth of 72% and 17% year-over-year. These segments may not be as large as the data center and gaming divisions, but they indicate Nvidia’s diversification and adaptability in emerging technology markets.

Featured image credit: Nvidia