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NVIDIA (NVDA) Q2 Datacenter Sales Surge on Generative AI Boom
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NVIDIA Corporation (NVDA - Free Report) reported overwhelming second-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the respective Zacks Consensus Estimate and marked a significant year-over-year improvement. The company’s latest quarterly performance reflected record revenues across its datacenter end market, which mainly benefited from growing investments in generative AI.
The company’s second-quarter performance reflected the continued strength of its Datacenter business on the growing adoption of cloud-based solutions amid the growing hybrid working trend. The strong demand for its chips from large cloud service and consumer internet companies also aided the segment’s top-line growth in the second quarter.
However, the Datacenter end-market business mostly benefited from the growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures. In the second quarter of fiscal 2024, the company’s revenues from the Datacenter business jumped 171% year over year and 141% sequentially, mainly due to growing investments in generative AI.
NVIDIA Corporation Price, Consensus and EPS Surprise
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power are being considered as the top choice for enterprises. NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing.
The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion (+/- 2%) from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the datacenter end market.
The proven success of generative AI has sparked competition among software makers, including Salesforce (CRM - Free Report) , Cisco (CSCO - Free Report) and Adobe (ADBE - Free Report) , to integrate the technology into their products.
Salesforce forayed into the generative AI space with the launch of Einstein GPT in March 2023. In June 2023, the company elevated the set of its generative AI tools with the launch of the AI Cloud service. With this, CRM claims to offer one-stop AI-powered solutions for enterprises looking to enhance productivity.
Salesforce’s AI Cloud is a suite of services that delivers enterprise-ready real-time, open and secure generative experiences across all applications and workflows. The suite will power new capabilities across Salesforce’s products, including Einstein service, data analysis software Tableau and workplace-messaging app, Slack.
Cisco’s AI and machine learning offerings encompass a wide range of computing solutions for enterprises, including a focus on cybersecurity. The company plans to enhance customer experience solutions, devices and its video conferencing platform, Webex Suite, with ML technologies, automation and generative AI features, from meeting summaries to visual enhancements.
The digital media solutions provider, Adobe, aggressively expanded its footprint in the generative AI space through partnerships and new solutions. Adobe has unveiled a family of generative AI models, Firefly, focused on the generation of texts and images. Per the company, Firefly will offer more precision, speed, power and ease in content creation. It will let users of various experience levels create high-quality images and stunning text effects.
At present, NVIDIA sports a Zacks Rank #1 (Strong Buy), while Adobe and Salesforce each carry a Zacks Rank #2 (Buy). Cisco carries a Zacks Rank #3 (Hold). Shares of NVDA, ADBE, CRM and CSCO have surged 220.7%, 51.9%, 54.9% and 15.9%, respectively, YTD. You can see the complete list of today's Zacks #1 Rank stocks here.
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NVIDIA (NVDA) Q2 Datacenter Sales Surge on Generative AI Boom
NVIDIA Corporation (NVDA - Free Report) reported overwhelming second-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the respective Zacks Consensus Estimate and marked a significant year-over-year improvement. The company’s latest quarterly performance reflected record revenues across its datacenter end market, which mainly benefited from growing investments in generative AI.
The company’s second-quarter performance reflected the continued strength of its Datacenter business on the growing adoption of cloud-based solutions amid the growing hybrid working trend. The strong demand for its chips from large cloud service and consumer internet companies also aided the segment’s top-line growth in the second quarter.
However, the Datacenter end-market business mostly benefited from the growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures. In the second quarter of fiscal 2024, the company’s revenues from the Datacenter business jumped 171% year over year and 141% sequentially, mainly due to growing investments in generative AI.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power are being considered as the top choice for enterprises. NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing.
The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion (+/- 2%) from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the datacenter end market.
The proven success of generative AI has sparked competition among software makers, including Salesforce (CRM - Free Report) , Cisco (CSCO - Free Report) and Adobe (ADBE - Free Report) , to integrate the technology into their products.
Salesforce forayed into the generative AI space with the launch of Einstein GPT in March 2023. In June 2023, the company elevated the set of its generative AI tools with the launch of the AI Cloud service. With this, CRM claims to offer one-stop AI-powered solutions for enterprises looking to enhance productivity.
Salesforce’s AI Cloud is a suite of services that delivers enterprise-ready real-time, open and secure generative experiences across all applications and workflows. The suite will power new capabilities across Salesforce’s products, including Einstein service, data analysis software Tableau and workplace-messaging app, Slack.
Cisco’s AI and machine learning offerings encompass a wide range of computing solutions for enterprises, including a focus on cybersecurity. The company plans to enhance customer experience solutions, devices and its video conferencing platform, Webex Suite, with ML technologies, automation and generative AI features, from meeting summaries to visual enhancements.
The digital media solutions provider, Adobe, aggressively expanded its footprint in the generative AI space through partnerships and new solutions. Adobe has unveiled a family of generative AI models, Firefly, focused on the generation of texts and images. Per the company, Firefly will offer more precision, speed, power and ease in content creation. It will let users of various experience levels create high-quality images and stunning text effects.
At present, NVIDIA sports a Zacks Rank #1 (Strong Buy), while Adobe and Salesforce each carry a Zacks Rank #2 (Buy). Cisco carries a Zacks Rank #3 (Hold). Shares of NVDA, ADBE, CRM and CSCO have surged 220.7%, 51.9%, 54.9% and 15.9%, respectively, YTD. You can see the complete list of today's Zacks #1 Rank stocks here.