CEO of leading global chip manufacturer Nvidia said that with the surge in revenue, artificial intelligence has reached a global tipping point.
Based in California, Nvidia dominates over 70% of AI chip sales and an even larger share in training generative AI models. With the booming development of AI, the company announced a series of astonishing quarterly earnings yesterday. From October 2023 to January 2024, revenue increased by 265% year-on-year, reaching $22 billion.
Annual revenue in 2023 exceeded $60 billion. At the same time, Nvidia has become one of the most valuable companies in the United States, with its stock market value rising by 225% in the past 12 months, despite recent declines.
Nvidia CEO Jensen Huang said on Wednesday, February 21, that this success is attributed to the continuous rise of AI: "Accelerated computing and generative AI have reached a tipping point. The demand from global enterprises, industries, and countries is surging."
There is no sign of this prosperity slowing down, as Nvidia predicts a 233% increase in quarterly revenue for this quarter, surpassing analysts' earlier forecasts last year.
In the past year, the company's stock price has more than tripled, pushing Nvidia's total market value above the $1.5 trillion mark (one of only seven trillion-dollar companies in the world), making it the flagship AI stock in the eyes of retail and institutional investors.
Challenges for Nvidia's AI Development
However, this does not mean that everything is without its challenges. Supply chain issues remain one of Nvidia's major obstacles.
In addition, as more companies seek to leverage AI, more competition will enter the market, posing new challenges for market leaders. While Nvidia has dominated the AI market in its early stages, it also needs to defend its dominant position as more companies enter the field.
Ipek Ozkardeskaya, Senior Analyst at Swissquote, told the BBC, "Nvidia... will face challenges as revenue growth may stabilize and optimism about these growth prospects will level off."
