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- Nvidia is experiencing high demand for its AI chips.
- CEO Jensen Huang assured analysts that the company is distributing chips "fairly."
- Nvidia's fourth-quarter revenue surpassed Wall Street expectations, reaching $22.1 billion.
Hot chip stock Nvidia has a problem — a good one.
The company is seeing so much demand for its AI chips that cofounder and CEO Jensen Huang had to give assurance that the company is allocating them "fairly."
"We do the best we can to allocate fairly and to avoid allocating unnecessarily," Huang said in a call with analysts after releasing fourth-quarter results on Wednesday, according to a transcript.
Huang was responding to a question about how Nvidia is allocating chips to all the companies — many of whom are competitors — that are clamoring for them.
Huang added that Nvidia works with cloud service providers to meet their expectations and timelines.
"Why allocate something when the data center's not ready. Nothing is more difficult than to have anything sit around," said Huang, saying Nvidia wants to avoid "allocating unnecessarily."
After all, companies involved in everything from healthcare and financial services to autonomous driving are getting into the AI game.
"At the core of it, we want to allocate fairly, avoiding waste and looking for opportunities to connect partners and end users," he added.
Nvidia reported another blowout quarter on Wednesday as it raked in $22.1 billion in revenue — which was 265% higher than a year ago and above Wall Street expectations.
The chipmaker's stock has been on a tear in the past year since the AI boom ignited by OpenAI's ChatGPT propelled the technology into the mainstream.
"Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations," said Huang in a press release on Wednesday.
Nvidia's stock has more than doubled in the last 12 months, prompting analysts to wonder if the chip giant could soon run out of steam.
Even Ark Invest's Cathie Wood questioned the stock, telling The Wall Street Journal in a podcast on Sunday that it has become an overvalued "check-the-box stock."
Nvidia shares rose 9.1% to $735.94 apiece in after-hours trade on Wednesday after results were released. They are up 36% this year to date.
from Business Insider https://ift.tt/TL4FnSX
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