NVIDIA’s AI-fueled hegemony and its future dominance

AI and business management banner with man holding smartphone with "AI" on screen by skrill1108 from Noun Project (CC BY-NC-ND 2.0)

By Yousaf K

Incorporated in Delaware, and headquartered in Santa Clara, NVIDIA is a multinational technology and corporation company.  Its primary functions revolve around accelerated computing across several industries.  Traditionally focused on application-programming interfaces (APIs) for data science, graphics processing units (GPUs) and chips for mobile computing, the company has reinvented itself as a major supplier of Artificial Intelligence (AI) hardware and software.  

Fueled by AI, NVIDIA’s performance over the last year has been phenomenal, and the underlying economics continue to support its AI-focused future.  On Wednesday, February 21, 2024, the company stunned the markets with its 4Q24 financial results.  Against expectations of $21bn, it posted revenues of $22.1bn – beating Wall Street forecasts of 208%, up 22% from Q3, and up 265% from a year ago.  It posted record quarterly Data Center revenue of $18.4bn, and full-year revenue hit a record high of $60.9bn, up 126%.  Jensen Huang, co-founder, president, and CEO of Nvidia Corporation, touting increased AI demand, noted “Accelerated computing and generative AI have hit the tipping point.  Demand is surging worldwide across companies, industries, and nations.”

Dan Ives, a Wedbush Securities Managing Director, and Senior Equity Research Analyst covering the Technology sector said, “NVIDIA and GPUs are the start of the spending wave, not the end.”  Positive sentiment continues to drive demand for NVIDIA GPUs as the appetite for AI-enabled devices and services increases substantially.  Goldman Sachs claims that AI generated products can boost the U.S economy by 0.4%, and an average increment of 0.3% of other markets.  Continuing its current AI-locked trajectory, NVIDIA could see multi-fold year-over-year growth through 2027.

Another big revenue earner for NVIDIA, gaming, saw a full-year revenue growth of 15%, topping out at $10.4bn.  Notable 4Q achievements include their GeForce RTX™ 40 SUPER Series GPU launch.  Starting at $599, the devices support the latest NVIDIA RTX technologies, including DLSS 3.5 Ray Reconstruction and NVIDIA Reflex.  They also reached the milestone of 500 AI-powered RTX games and applications utilizing NVIDIA DLSS, ray tracing and other NVIDIA RTX technologies.

The company’s data center operations also showed up to the performance party, posting record revenues of $18.4bn, up 27% from the Q3 and up 409% year-over-year.  Full-year revenue rose 217% to a record $47.5bn, after notable collaborations with Google, Amazon Web Services, and the U.S. government’s National Artificial Intelligence Research Resource.

Founded in 1993, NVIDIA continues to pioneer – from inventing the GPU in 1999, nurturing the PC gaming market, to its reinvented focus on AI.  It continues to fuel industrial digitalization, showcasing its dominance and robust growth opportunities across multiple markets worldwide.  NVIDIA’s hegemony is here to stay and forecasted to accelerate over its promising immediate future.

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