NVIDIA’s Meteoric Rise: What’s Next After Its May 2024 Earnings Report? Written May 25th, 2024
On May 22, 2024, NVIDIA (NASDAQ: NVDA) dropped some major news with its Q1 fiscal 2025 earnings report, showing just how explosive the demand for AI chips has been. The company reported $26.0 billion in revenue, up a whopping 262% year-over-year, driven by a record-breaking $22.6 billion from its data center segment alone. NVIDIA’s H100 chips are now indispensable to AI and cloud services, making it a massive player in the AI space.
But the big question is: Can NVIDIA keep this momentum going? And, which companies could benefit from NVIDIA’s success in AI, gaming, and data centers?
NVIDIA’s AI Chip Dominance
This report confirms what many already knew: AI is no longer a buzzword—it’s driving industries forward, and NVIDIA is leading the charge. The A100 and H100 GPUs have become key to AI workloads, powering massive projects like ChatGPT. Demand from cloud giants AWS, Google Cloud, and Microsoft Azure has skyrocketed, and it’s clear NVIDIA is positioned to stay at the forefront.
NVIDIA’s success in the AI space is largely thanks to its dominant data center segment, where companies across healthcare, finance, and tech are racing to integrate machine learning and AI tools. According to CEO Jensen Huang, the demand for AI chips is only going to grow, with unprecedented orders for data center GPUs already in the pipeline.
Gaming Sector Resilience
While AI gets all the attention, NVIDIA’s gaming business continues to show strength. Gaming revenues came in at $2.7 billion for Q1, signaling stability in a market that faced softness last year. With the upcoming release of the RTX 50 series, NVIDIA’s gaming division could see a resurgence later this year.
10-for-1 Stock Split Announcement
NVIDIA also announced a 10-for-1 stock split, making shares more accessible to retail investors by lowering the price per share. This move follows in the footsteps of companies like Apple and Tesla, whose stock splits often led to price gains as more investors got involved. Expect increased trading activity once the split happens later this year, as lower prices tend to attract retail investors.
Who Else Stands to Gain?
NVIDIA’s rise isn’t just good news for them. Other companies set to benefit include:
AMD (NASDAQ: AMD): As NVIDIA’s biggest competitor, AMD is making strides with its MI300 accelerator, a direct competitor to NVIDIA’s AI chips. With data center CPU dominance, AMD is also a contender in the growing AI chip market.
TSMC (NYSE: TSM): TSMC manufactures the chips for both NVIDIA and AMD, so as AI demand increases, TSMC stands to gain significantly from both companies’ growth.
ASML Holding (NASDAQ: ASML): ASML’s advanced lithography machines are essential for making cutting-edge AI chips. The more AI grows, the more ASML benefits.
Micron Technology (NASDAQ: MU): NVIDIA’s GPUs need a lot of memory, and Micron’s GDDR6 and GDDR6X memory chips are critical to meeting that demand.
Looking Ahead for NVIDIA
With AI and data centers driving NVIDIA’s revenue, the future looks bright. But they’re not stopping there—NVIDIA is looking to break into autonomous driving, robotics, and healthcare sectors, all of which could fuel even more growth. That said, challenges like supply chain constraints and rising competition from AMD and Graphcore might pose some challenges in the coming years.
The Bottom Line
NVIDIA’s May 2024 earnings confirm its position as a leader in AI and semiconductors. While its stock price has risen quickly, investors should keep an eye on other companies riding the same AI wave, like AMD, TSM, ASML, and Micron. AI is the future, but picking the right companies to invest in will be key to staying ahead.
https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025
https://www.theguardian.com/technology/article/2024/may/22/nvidia-quarterly-earnings