Nvidia (US:NVDA) triggered a jump in semiconductor shares across the board last week when management revealed its second-quarter sales would be billions ahead of forecasts thanks to the artificial intelligence (AI) boom. Cloud computing customers are scrambling to get their hands on the company's chips as they are needed to train AI models.
The California-based chip designer said its second-quarter revenue would come in at $11bn (£8.9bn) – 50 per cent ahead of analyst expectations. Given analysts were already extremely bullish on the business, this is a remarkable beat, and sent Nvidia’s share price up by a third.
“A trillion dollars of installed global data centre infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process,” said Nvidia chief executive Jensen Huang. Investors lapped up his rhetoric; the company’s new market capitalisation in excess of $1trn makes it the sixth most valuable business in the world.