NVIDIA - The AI boom is real

The most anticipated quarterly results did not disappoint.

In fact, it was a treat that no one expected.

So what made the shares pop so much?

Data center revenues smashed records, up 14% a year ago, led by demand for generative AI and large language model (LLM) using GPUs based on NVIDIA Hopper and Ampere architecture.

Gaming revenue pulled down the total revenue, down 38% and 22% sequentially. This was similar to other chip companies.

GAAP and non-GAAP gross margins declined YoY but increased QoQ.

Lower Gaming margins were buffered by higher contributions from Automotive and better Data Center margins.

This would be the main reason for the share price soaring to dizzying heights.

To give a perspective, NVIDIA's Q2 revenue guidance was 52% ahead of the USD 7.1 billion consensus revenue estimate for the quarter.

One does not simply over-project revenue guidance against the street's estimates.

Also, GAAP and non-GAAP gross margins are going back up to 68.6% and 70.0% respectively.

This is definitely why the share price is now in frenzy mode.

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