Nvidia CEO Jensen Huang: "Demand is Just So Strong" as Supply Struggles to Keep Up

Nvidia Faces Unprecedented Demand Amid Supply Constraints

Nvidia is experiencing a surge in demand for its AI chips, driven by the need for advanced data center capabilities. CEO Jensen Huang, in a conversation with Yahoo Finance, underscored that the company is struggling to meet the overwhelming demand, even as it transitions from its Hopper AI platform to the next-generation Blackwell system.

Surpassing Expectations

Nvidia's first-quarter performance exceeded Wall Street forecasts, with notable financial metrics including:

• Adjusted Earnings Per Share (EPS): $6.12, up 461% year-over-year.
• Revenue: $26 billion, marking a 262% increase from the previous year.
• Non-GAAP Operating Income: $18.1 billion for the first quarter.

For the current quarter, Nvidia projects revenue to reach $28 billion, surpassing analysts' expectations of $26.6 billion.

Transitioning to Blackwell

Despite concerns about a possible dip in Hopper orders ahead of the Blackwell release, Huang reported that Hopper demand continued to grow even after the announcement of Blackwell. "That kind of tells you how much demand there is out there," Huang said, indicating that both platforms will see demand exceeding supply well into next year.

Complex Supply Chain

Huang described the intricate nature of Nvidia's products, stating, "Every component, every part of our data center, is the most complex computer the world's ever made." This complexity contributes to ongoing supply constraints, making it challenging for the company to keep pace with demand.

Financial Milestones

Alongside its impressive earnings, Nvidia announced several key financial moves:

• Stock Split: A 10-to-1 stock split will go into effect on June 10, providing shareholders with 10 shares for every one share they currently own.
• Dividend Increase: Nvidia boosted its quarterly dividend to $0.10 per share, up from $0.04.

Strong Market Position

Nvidia's stock rose as much as 6% in extended trading following the earnings announcement. The company's strategic positioning in AI training and inferencing remains robust, with Huang confident in Nvidia's continued dominance. "We have a great position in inference, because inference is just a really complicated problem," he noted.

Expanding Customer Base

Beyond major cloud service providers like Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN), Nvidia is seeing increased sales to a diverse range of companies, including Meta (NASDAQ: META) and Tesla (NASDAQ: TSLA). Huang highlighted the automotive industry as a significant growth area, particularly in autonomous driving technology.

"Tesla is far ahead in self-driving cars," Huang said. "But every single car, someday we will have to have autonomous capability."

Nvidia's strong Q1 performance and ongoing demand for its AI chips underscore the company's critical role in advancing data center capabilities and AI technology. Despite supply challenges, Nvidia's strategic initiatives and robust market position indicate a promising future. For more detailed analysis and real-time updates, visit StockInvest.us.