Nvidia (NVDA) CEO Jensen Huang isn’t saying there’s a lack of demand; it’s the supply that’s lacking.
In an exclusive interview with Yahoo Finance after the company’s first-quarter earnings report on Wednesday, Huang dismissed concerns that demand might falter as the company transitions between its current and next-generation AI chips.
“People want to put these data centers in right now,” Huang said. “They want to get our [graphics processing units] “We want people to start working, earning money and saving now. The demand is very strong.”
Nvidia is moving away from its current Hopper AI platform to the more advanced Blackwell system, and ahead of the company’s earnings report on Wednesday, some Wall Street analysts wondered whether some customers might be wary of ordering Hopper ahead of the launch of the more popular Blackwell unit later this year.
“Demand for Hopper has grown throughout the quarter since Blackwell’s announcement, which shows how much demand there is,” Huang said.
Huang added that demand for both platforms will exceed supply until next year, and the complexity of these chips will also be a challenge the company works to address.
“Every component, every part of our data center is the most complex computer the world has ever built,” Huang said. “So it’s only natural that there are constraints on just about everything.”
For the first quarter, NVIDIA reported results that beat Wall Street expectations, reporting adjusted earnings per share of $6.12 and revenue of $26 billion, up 461% and 262%, respectively, from the prior year. First-quarter non-GAAP operating income reached $18.1 billion.
NVIDIA’s quarterly earnings beat expectations again on Wednesday. (Source: company filing)
For the current quarter, Nvidia expects revenue to reach $28 billion, plus or minus 2%, beating analysts’ expectations of $26.6 billion.
The company also announced a 10-for-1 stock split (shareholders will receive 10 shares for each share of the company they currently hold), effective June 10 for shareholders of record as of June 7.
Nvidia also joined other big tech companies in increasing its quarterly dividend, with shareholders receiving an increase of $0.10 per share from $0.04.
Nvidia shares rose more than 9% in early trading Thursday.
Huang also discussed how NVIDIA is navigating the transition from AI training, where companies train AI models, to AI inference, where those same companies deploy models for their customers to use.
Questions are swirling about whether large cloud providers like Microsoft (MSFT), Google (GOOG, GOOGL), and Amazon (AMZN) will phase out Nvidia’s chips for inference and switch to their own products.
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But Huang believes Nvidia’s products are just as powerful for inference as they are for training.
Nvidia CEO Jensen Huang speaks at the company’s offices in Santa Clara, California, on April 16, 2024. (Associated Press/Jeff Chiu, File) (Associated Press)
“We’re in a good position at inference because inference is a very complex problem,” he said.
“The software stack is complex. The types of models people are using are complex. The majority of inference today is done by Nvidia, so we expect that to continue.”
The CEO also noted that sales to customers outside of the big cloud service providers are growing, saying that a range of companies, from Meta (META) and Tesla (TSLA) to pharmaceutical companies, are increasingly buying Nvidia’s chips. In fact, outside of cloud companies, the largest industry using Nvidia’s data center chips is the automotive industry.
“Tesla is far ahead in self-driving cars,” Huang said, “but at some point all cars will need to have self-driving capabilities.”
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