Nvidia, one of the world's trillion-dollar companies, has experienced significant growth in its revenue since joining Apple, Amazon, Google, and Microsoft. In its Q2 2024 earnings report, the company disclosed that it generated $13.5 billion in revenue. The demand for Nvidia's generative AI chips has surpassed expectations, outperforming the sales of desktop and laptop GPUs in a declining PC industry. Notably, the data center sector contributed $10.32 billion to Nvidia's revenue, more than doubling in just one quarter. As a result, Nvidia achieved a profit of $6.188 billion, marking an 843 percent increase year over year.

Nvidia’s Q2 2024, by revenue.
Nvidia’s Q2 2024, by revenue.  Image: Nvidia

While gaming revenue fell short of pandemic highs, it still saw a 22 percent year-over-year increase, amounting to $2.48 billion. Nvidia is optimistic about the future growth of the gaming sector and anticipates an upgrade opportunity for gamers. It also revealed that 20 percent of its install base currently uses an RTX 3060 or better GPU.

Looking ahead, Nvidia is projecting a revenue of $16 billion in the next quarter, largely driven by the data center sector. The company's CFO, Colette Kress, emphasized this during the earnings call. Additionally, Nvidia's stock price rose by 8.5 percent in after-hours trading.

Nvidia's upcoming AI chip, the GH200, is set to launch in mid-2024 at an undisclosed price. However, the demand for the next quarter will primarily be for existing AI chips. Nvidia plans to increase its supply over the next few quarters and collaborate with supply partners to enhance capacity. Furthermore, Nvidia's L40 GPU is expected to cater to the growing demand across various workloads.

In terms of competition, Nvidia's chief rivals, Intel and AMD, currently lack compelling alternatives to Nvidia's generative AI silicon. AMD's MI300 is projected to enter the market in early 2024, possibly rolling out as early as the fourth quarter. Both AMD and Intel are also exploring the integration of AI features into client chips, in addition to servers in the cloud. AMD CEO Lisa Su has voiced her belief that AI will be an integral growth driver for the company in the next five years.

Nvidia's remarkable revenue growth, particularly in the data center sector, positions the company as a prominent player in the AI chip market.