By Chavi Mehta, Stephen Nellis and Jane Lanhee Lee
Feb 22 (Reuters) – Chipmaker Nvidia Corp on Wednesday forecast first-quarter revenue above Wall Street estimates, as its chief executive said using its chips to power artificial intelligence (AI) services while chatbots had “exploded in the last 60 days”.
The sell-off outlook sent Nvidia shares up 8% in extended trading. The world’s largest supplier of chips used in data centers to train AI has become a key hardware supplier for tech giants like Microsoft Corp building services like chat-based search engines.
AI is one of the few areas where tech companies are still investing despite industry job cuts. Microsoft and Alphabet Inc, for example, are laying off thousands of employees, but they’re also in a race to equip their search engines with chatbot technology, even if it could add billions to your operating costs. .
Analysts believe that Nvidia, more than any other company, is best positioned to benefit from this cost increase, since it controls about 80% of the market for graphics cards, or GPUs, used to speed up computer work. .
During a conference call with investors, Nvidia CEO Jensen Huang announced a new service in which Nvidia will offer its cloud computing service directly to companies to rent all of its technologies to develop their own cloud computing services. cloud computing. create text, images and other forms of data.
AI “is not yet mainstream in enterprises, but we believe that by hosting everything in the cloud, from infrastructure to operating system software to pre-trained models, we can accelerate the adoption of generative AI in enterprises,” Huang said.
The company forecasts revenue for the current quarter of $6.5 billion, plus or minus 2%. According to data from Refinitiv, the average analyst expects revenue of $6.33 billion.
Revenue for the quarter ended Jan. 29 was $6.05 billion, versus a median analyst estimate of $6.01 billion.
“The release of generative AI models and the unfolding AI arms race should accelerate the adoption of the company’s new H100 products,” said Edward Jones analyst Logan Purk.
Nvidia’s outlook also helped boost the stock price of rivals such as Advanced Micro Devices, whose shares rose 3% on Nvidia’s results.
(Reporting by Chavi Mehta in Bengaluru, Stephen Nellis in San Francisco and Jane Lee in Oakland, California, edited in Spanish by Tomás Cobos)