The Rise of Nvidia: Breaking Records and Changing Industries

Nvidia, the renowned graphics processing unit (GPU) and AI chip company, has achieved staggering success in its third fiscal quarter of fiscal 2024, surpassing all expectations and setting new records. With a remarkable growth rate of 206% year-over-year and 34% sequentially, Nvidia reported a record Q3 revenue of $18.2 billion. In this article, we will delve into the factors contributing to Nvidia’s unprecedented success and how it is transforming industries with its accelerated computing and generative AI technology.

Nvidia CEO, Jensen Huang, attributes the company’s exceptional growth to the industry-wide transition from general-purpose to accelerated computing and generative AI. Huang emphasizes that large language model startups, consumer internet companies, and global cloud service providers were the initial pioneers in this transition. Furthermore, nations, regional cloud service providers, and enterprise software companies are now investing heavily in AI clouds and integrating AI copilots and assistants into their platforms. Enterprises are also leveraging custom AI to automate various industries, contributing to the global wave of AI adoption.

Nvidia’s expansive growth is supported by various growth engines operating at full throttle. The company’s GPUs, CPUs, networking, AI foundry services, and Nvidia AI Enterprise software all play pivotal roles in fueling Nvidia’s success. The advent of generative AI has further propelled Nvidia’s growth, with the company’s value skyrocketing to an astonishing $1.23 trillion. Nvidia’s data center segment, encompassing server GPUs, networking, and AI cloud software, witnessed a remarkable 279% annual growth and a sequential growth of 41%, contributing 79% of the total revenue for Q3.

Nvidia’s financial performance surpasses analyst expectations, with GAAP earnings per diluted share reaching $3.71, marking a more than 12-fold increase from the previous year. Non-GAAP earnings per diluted share grew nearly 6 times compared to a year ago. The Q3 revenue surge demonstrates the company’s market dominance and its ability to capitalize on the growing demand for accelerated computing and generative AI technologies.

Anticipating continued success, Nvidia’s outlook for the fourth quarter of fiscal 2024 predicts revenue of $20 billion, with gross margins and operating expenses expected to remain strong. However, challenges lie ahead as high-end computing devices, such as Nvidia’s Hopper chips, face restrictions in sales to China due to recent government regulations. While Nvidia expects sales decline in Q4 due to these restrictions, it anticipates offsetting the decline through sales in other regions. Nevertheless, Nvidia faces limited visibility on the long-term impact of these restrictions and acknowledges the potential substantial decline in data center revenue from China.

As Nvidia continues to revolutionize multiple industries, it introduces groundbreaking products and enhancements. The Nvidia HGX H200, featuring the new Nvidia H200 Tensor Core GPU, represents a significant advancement in the field, being the first GPU incorporating HBM3e memory. This innovative product is expected to be available in the second quarter of the following year. Moreover, Nvidia’s gaming division witnessed considerable growth, with Q3 revenue amounting to $2.86 billion. The release of DLSS 3.5 Ray Reconstruction and TensorRT-LLM for Windows further solidify Nvidia’s position in the gaming industry, offering high-quality ray-traced graphics and accelerating on-device LLM inference.

Nvidia’s impact extends beyond gaming, with its professional visualization division generating $416 million in Q3. Collaborations with industry giants like Mercedes-Benz, which utilizes Nvidia Omniverse to create digital twins for planning and operating manufacturing plants, showcase the transformative potential of Nvidia technologies. Additionally, Nvidia’s revenue from the automotive sector reached $261 million, highlighting the company’s expanding influence in this industry.

Acknowledging the growing importance of computer infrastructure investment, Nvidia has actively engaged with governments worldwide. The company is working closely with the Indian government to enhance internal computing infrastructure, recognizing the rise of sovereign AI clouds. Nvidia aims to empower every company to develop its own custom AI models, paving the way for further advancements and innovation.

Nvidia’s record-breaking performance in its third fiscal quarter of fiscal 2024 demonstrates its resounding success in the transition to accelerated computing and generative AI. With its diverse growth engines and comprehensive product portfolio, Nvidia continues to revolutionize industries, from gaming to automotive and beyond. Despite challenges posed by government restrictions in certain regions, Nvidia remains focused on innovation and collaboration, aiming to empower global industries with AI technologies. As Nvidia’s influence expands and its market value soars, the era of generative AI takes off, promising a future of unprecedented possibilities.


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