Nvidia’s AI Victory Lap

The most important acronym in business right now is AI, but another one—GPU—isn’t far behind. Today’s earnings forecast from chip designer Nvidia, which makes graphics processing units that power ChatGPT and its ilk, shows what surging demand for the data center chip is worth. 

Nvidia said it expected to generate about $11 billion in revenue in the current fiscal quarter, which ends in July, up 64% from the same period last year. That figure, which CEO Jensen Huang said will be buoyed by demand for artificial intelligence software, would be $2.5 billion higher than Nvidia’s prior record for quarterly revenue. Then there’s the expected profit increase: Nvidia said gross margins would rise by nearly 4 percentage points in the July quarter. Even before today’s eye-popping projection, analysts expected the company’s earnings per share to rise 30% over the next 12 months, compared to 6% for a basket of 11 other semiconductor companies.