Nvidia’s Wednesday’s results capped another big earnings season for the tech sector. The semiconductor giant reported another blockbuster quarter, with sales up 85% to $82 billion. It also announced an $80 billion share buyback program and raised its dividend.
As is customary after Nvidia’s strong results, investors were unimpressed, and the stock fell for four straight sessions after the results.
I spoke to CNBC’s Arjun Karpal to get his take on the highlights.
Kai: What does this revenue say about Nvidia’s relationship with China?
Arjun: Nvidia CEO Jensen Huang sounded pretty defeated about China in an interview with CNBC. He said Nvidia has “significantly conceded” China’s AI chip market to Huawei, one of China’s largest tech companies.
Nvidia is embroiled in geopolitical disputes and export restrictions between the US and China. The U.S. has permission to sell certain chips to China, but the Chinese government recently urged local companies to buy domestic alternatives. That’s where Huawei comes in. Huawei and other Chinese tech companies have developed chips designed for AI that rival Nvidia’s GPUs.
While they don’t quite compete with Nvidia’s top-end products, the Chinese chips fill the void left by the world’s most valuable company.
Kai: Nvidia has made major changes to the way it reports its earnings. Why is it important?
Arjun: Nvidia currently reports revenue in two categories: data center and edge computing. The data center business is where the revenue from hyperscalers and sovereign AI projects comes from. Edge computing is revenue from PCs, robotics, automobiles, and more.
Nvidia is known for its GPUs in data centers, but the company is trying to tell investors it’s much more than that: it’s the computing platform of the future, whether it’s for AI factories, robots or cars.
Kai: Nvidia is known for their GPUs. Why was the company talking about a $200 billion opportunity in the CPU market?
Arjun: Nvidia’s graphics processing units (GPUs) have powered the training of some of the world’s most advanced models. But as the world moves from training to “inference,” the focus is on the actual process that executes these models: the central processing unit (CPU).
Some critics say that while Nvidia has an advantage in GPUs, there will be more competition in the CPU space. Nvidia tried to tell investors that it would remain a dominant player in the CPU world.
Nvidia’s CFO said the company’s new Vera CPUs will open up a $200 billion market. And Nvidia expects total CPU revenue to be $20 billion this year.
Latest updates
Quantum computing stocks soared Thursday after the U.S. government announced it would give $2 billion in subsidies to nine companies working in the field.
Anthropic is expected to generate $10.9 billion in revenue in the second quarter, CNBC confirmed Wednesday. This number exceeds the AI company’s sales for the entirety of last year.
OpenAI is gearing up for what could be its biggest public market debut in history, preparing to secretly file a draft IPO prospectus as early as Friday, CNBC confirmed Wednesday.
AMD The company announced it will invest more than $10 billion across Taiwan’s semiconductor and AI ecosystem to improve chip production and performance.
The Pokémon card craze is fueling lines, sell-outs and frenzy at retailers in Britain, the United States and elsewhere, Arjun writes.
This week’s stock
nvidia stock
Nvidia stock fell just under 2% on Thursday. That’s despite the company reporting another strong quarterly profit. Some people can never be happy.
