Nvidia CEO Jensen Huang Identifies $1 Trillion Opportunity Amid Generative AI Shift: 'Data Centers Will Be All Accelerated Computing'

Benzinga Neuro

August 28, 2024

NVIDIA Corp. (NASDAQ:NVDA) is gearing up to seize a $1 trillion opportunity as data centers transition to accelerated computing and generative artificial intelligence.

What Happened: During the second quarter earnings call, CEO Jensen Huang outlined the company’s strategy to lead this transformation. Huang stated, “The world builds about $1 trillion worth of data centers. In a few years, $1 trillion worth of data centers will be all accelerated computing.”

This shift is driven by the need for more efficient computing and the rise of generative AI. NVIDIA reported robust financial results for the second quarter, with revenue hitting $30 billion, marking a 122% year-over-year increase. Data center revenue surged to $26.3 billion, up 154% from the previous year.

Huang highlighted the strong demand for Nvidia’s current Hopper architecture GPUs and the anticipation for the upcoming Blackwell platform, which is set to begin shipping in the fourth quarter. He described Blackwell as “a step-function leap over Hopper” and noted its development took nearly five years and seven unique chips.

Nvidia is also enhancing its networking capabilities with NVLink, Quantum InfiniBand, and Spectrum-X platforms to meet diverse data center needs. The company is ready to support enterprises adopting AI technologies with its AI Enterprise platform.

See Also: CrowdStrike Q2 Earnings: Revenue Beat, EPS Beat, ARR Up 32% ‘Even More Customer-Obsessed’ Company Following IT Outage In July

Why It Matters: The company also issued an above-consensus third-quarter revenue guidance and announced a $50 billion stock repurchase authorization.

Industry experts like Gene Munster have expressed confidence in Nvidia’s long-term potential, emphasizing that AI will be “bigger than the internet.” Despite a 9% decline in Nvidia’s stock, Munster remains optimistic about its upward trajectory.

Jim Cramer also weighed in, criticizing those who abandoned Nvidia stock despite its strong earnings performance. He noted that the company has always been misunderstood by “sunshine soldiers and summer patriots.”

Price Action: In after-hours trading, Nvidia fell 6.89% to $116.95. During the regular trading session, the stock was down 2.10%. Year to date, NVDA has seen a remarkable gain of 160.76%, according to data from Benzinga Pro.

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Image Via Shutterstock

This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote

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