Nvidia’s stock price soared during the early hours of trading on Thursday, nearing its historical peak as it reported exceptional earnings for the third quarter.
During #LenovoTechWorld, CEO Jensen Huang of NVIDIA collaborated with Lenovo CEO Yuanqing Yang to unveil the Lenovo Hybrid AI Advantage powered by NVIDIA, showcasing innovative solutions incorporating @Lenovo’s newest Neptune liquid-cooling technology for #NVIDIABlackwell. https://t.co/uhCReSHBBD
— NVIDIA (@nvidia) October 16, 2024
Nvidia has now positioned itself as the second most valuable company globally, following Apple, thanks to an explosion in demand fueled by substantial investments in AI technology over the last eighteen months. This surge has put pressure on the overall semiconductor supply chain, particularly impacting Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia’s primary supplier.
TSMC, recognized as the largest contract chip manufacturer worldwide, announced unprecedented earnings for the third quarter on Thursday.
📣 At the NVIDIA AI Summit, Jennifer Granholm, the US Secretary of Energy, spoke about #AI’s significant role in tackling issues in clean #energy innovation, scientific advancements, and national safety.
Check out the recap post for further details: https://t.co/MbubI6txtl
— NVIDIA AI (@NVIDIAAI) October 16, 2024
C.C. Wei, the Group CEO, emphasized that the demand driven by AI is “authentic and just the beginning,” while suggesting that overall market dynamics outside of AI investments are leveling out and starting to show signs of recovery. TSMC reported a historic quarterly profit of approximately US$10.06 billion, projecting around 30% growth for the entire year and capital expenditures exceeding $30 billion for this year, with further growth anticipated in 2025.
Heard on the Street: It remains unclear if the substantial AI investments by Big Tech companies will prove to be a valuable asset or a financial drain.
Capital expenditures from Microsoft, Google, Amazon, and Meta are expected to keep climbing, while Apple’s foray into AI is shrouded in uncertainty. https://t.co/rl03bEFSOB via @WSJ— Paul Triolo (@pstAsiatech) October 16, 2024
Analyst Dan Ives from Wedbush characterized TSMC’s earnings as vital for the narrative surrounding the AI revolution and future growth, asserting that “TSMC is crucial for the tech and AI sectors.”
According to market research by IDC, spending on generative AI could surpass $150 billion by 2027, indicating a compounded annual growth rate of around 86% compared to 2023 figures.
Nvidia stock nears all-time high
Overall spending in AI, encompassing software, hardware, and services, is expected to more than double from $235 billion in the previous year to approximately $632 billion by 2028.
Advanced Micro Devices (AMD) recently informed shareholders that the AI accelerator market—integral for large-language models utilized by major players such as Microsoft, Alphabet, and Meta Platforms—might grow to $500 billion in the next three years, reflecting a 25% rise from its earlier prediction. Goldman Sachs has recently revised its price forecast for Nvidia, highlighting the company’s essential position in the AI chip landscape. Nvidia anticipates revenue for the current quarter to be around $32.5 billion, more than double that of the same time last year, despite experiencing some delays in launching its new Blackwell processors due to design alterations and supply-chain challenges.
Nvidia’s CFO, Colette Kress, indicated that the Blackwell processors are projected to generate “several billion” in revenue for the fiscal fourth quarter ending in January, with legacy Hopper sales speeding up in the latter part of the year. Nvidia’s shares increased by 3.05% in premarket trading, suggesting an opening price around $139.86—nearly reaching its historical high of $140.76. TSMC’s shares also saw significant gains, rising 8.8% to $204.00 each, contributing to a year-to-date increase of over 90%.
