Nvidia Shatters Expectations with $13.5 Billion Revenue, Driven by Soaring Demand for AI Chips

In a resounding financial triumph, Nvidia Corp. has far outstripped its projected quarterly earnings, pulling in a staggering $13.5 billion in revenue. This result easily eclipsed the Wall Street estimate of $11.2 billion, showcasing the company’s dominance in the ever-growing artificial intelligence (AI) sector.

The bulk of Nvidia’s stellar performance can be attributed to its data center business, which features powerhouse AI chips like the A100 and H100. These chips are critical for building and operating AI applications. The company reported a whopping $10.32 billion in data center revenue, marking a 171% year-over-year increase.

Looking forward, Nvidia has set the bar even higher, predicting a fiscal third-quarter revenue of around $16 billion. This forecast surpasses the $12.61 billion expected by financial data provider Refinitiv and indicates a potential year-over-year growth of 170%.

What the CEO Says

Net income soared to an astounding $6.19 billion, or $2.48 per share, up from last year’s $656 million, or 26 cents per share. “The world has something along the lines of about a trillion dollars’ worth of data centers installed, in the cloud, enterprise and otherwise,” Nvidia CEO Jensen Huang told analysts. “That trillion dollars of data centers are in the process of transitioning into accelerated computing and generative AI.”

Unlike competitors Intel, Micron Technologies, and Advanced Micro Devices (AMD), Nvidia has strategically funneled significant resources into the development of chips specifically designed for AI systems. This specialized focus has given them an edge as generative AI systems, requiring tremendous computational power, become increasingly prevalent.

Demand for AI Chips is Rising Significantly

The voracious appetite for these specialized chips has not only caused a market shortage but has also made them highly sought after by major entities and countries such as Saudi Arabia and the United Arab Emirates. With its roots tracing back to 1993 as a pioneer in video game chips, the Santa Clara, California-based firm has unparalleled experience in developing these complex chips.

This year has been nothing short of transformative for Nvidia, as its share prices have tripled. The company became the first chipmaker to reach a $1 trillion valuation at the end of May, largely thanks to the rapid proliferation of generative AI technologies. Investors are evidently confident that Nvidia will continue to be a major beneficiary of this trend.

Further bolstering its financial position, Nvidia announced that its board of directors had authorized a $25 billion share buyback program following the purchase of $3.28 billion in shares during the quarter.

In sum, Nvidia’s blockbuster performance and ambitious plans signal not just the strength of the company but also the unbridled potential of the AI industry it so prominently leads.

If you’re wondering about the halal status of Nvidia’s stock and considering an investment, don’t worry; we have the information you need.

Is Nvidia Stock Halal?

Is Nvidia stock Halal? This question often resonates among Muslim investors who are keen to ensure their investments are Shariah-compliant.

Based on three essential criteria — business activity, interest-bearing debt to market capitalization, and interest-bearing securities to market capitalization — Nvidia appears to meet all the requirements for being considered a halal stock.

A significant 97.96 % of Nvidia’s revenue comes from Shariah-compliant activities such as from compute & networking and graphics where they design graphics processing units (GPUs) for the professional markets. Moreover, the company’s interest-bearing debt amounts to only 2.33% of its market capitalization, falling well under the 30% threshold considered acceptable under Islamic law.

Further solidifying its Halal status, Nvidia’s investments in interest-bearing securities constitute a mere 3.26% of its market capitalization, again comfortably below the 30% limit set by Shariah principles.

Check out the detailed Musaffa’s halal stock screening result on Nvidia here.

Given these financial parameters, along with the company’s robust performance where their sales increased twofold, resulting in a net profit of US$6.19 billion, a staggering rise compared to the previous year. Nvidia stands out as a promising option for long-term growth investors who adhere to Islamic finance guidelines.

In conclusion, after thorough financial and business activity screening, Nvidia passes all criteria for being Shariah-compliant. This makes Nvidia stock a halal investment option, answering the query that many Muslim investors have been pondering.

If you are interested in learning more about Islamic finance-related topics, please click here and visit our academy.

Also, feel free to sign up for our free Halal stock screening service at musaffa.com

Disclaimer: Important information