Financial strategy and management

Nvidia's revenues fly thanks to data centre and cloud boom

Posted by MoneyController on 23.05.2024

Nvidia is once again surprising with its revenues above expectations. Driving the business of the company founded by Jensen Huang seems to be above all the use of chips in data centres and by cloud service providers.

Revenues Above Expectations

Nvidia is continuing its run in the markets, after its first quarter figures for this year came in even above expectations: revenues of USD 26 billion, a 262% increase over the same period last year. Expectations for second quarter revenues are around USD 28 billion. Since the beginning of this year, the stock on the stock exchange has almost doubled in value: from just under USD 440 to the current USD 876.

The data centre business

As Kif Leswing (CNBC) points out, it is the data centre business, which grew by 427 per cent last quarter due to increasing demand, that has driven the results of the Californian microprocessor company. After all, Nvidia has among its customers no less than companies such as Amazon, Google, Microsoft and Oracle. In addition to these companies, as Leswing explains, there are also a number of start-ups that buy Nvidia microprocessors and after installing them, rent them by the hour.

Cloud service providers' hunger for microprocessors

The company remains optimistic about its growth prospects, with Nvidia CFO Colette Kress believing that demand for the new Blackwell model could outstrip supply until next year. Kress also stated that investing in Nvidia's chips can be a very profitable investment: thanks to rentals, in four years the return can be up to five dollars for every dollar spent. So it is not surprising that Nvidia CEO and founder Jensen Huang pointed out that it is precisely cloud service providers (from the largest to thousands of start-ups) that are putting pressure on the company to deliver the largest number of microprocessors in the shortest possible time.

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