Nvidia’s Revenue Soars as AI Chip Revolution Continues

Nvidia reported fiscal third-quarter results that surpassed Wall Street’s predictions. The chipmaker’s revenue grew 206% year over year during the quarter ending October 29.

Revenue came in at $18.12 billion vs. an expected $16.18 billion. Earnings also performed well, coming in at $4.02 per share vs. an expected $3.37 per share.

Nvidia stock has gone up 241% so far this year, vastly outperforming the S&P 500 index, which is up 18% over the same period.

However, the company is warning of headwinds on the horizon. It expects a negative impact in the next quarter because of export restrictions affecting sales to companies in China and other countries.

Nvidia is working with some clients in the Middle East and China to obtain U.S. government licenses for sales of high-performance products. Nvidia is trying to develop new data-center products that comply with government policies and don’t require licenses.

Looking ahead, Nvidia anticipates it will make $20 billion in revenue for the fiscal fourth quarter, marking an impressive 231% revenue growth.

Nvidia’s runaway success is an example of how the AI boom is benefitting some companies. As recently as two years ago, sales of graphic processor units (GPU) for playing video games on PCs were the largest source of Nvidia’s revenue. Now the company gets most of its revenue from its high-grade chips being used in server farms.