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(Reuters) -Nvidia Corp on Wednesday forecast second-quarter revenue more than 50% above Wall Street estimates, with the company saying it is boosting supply to meet surging demand for its artificial intelligence chips, which are used to power ChatGPT and many similar services.
Shares of the most valuable U.S. chip company jumped about 14% in trading after the bell. The artificial-intelligence boom has helped Nvidia (NASDAQ:NVDA) become the fifth-most valuable U.S. company by market value.
Nvidia has strained to meet demand for its AI chips, with Tesla (NASDAQ:TSLA) Inc Chief Executive Officer Elon Musk, who is reportedly building out an artificial-intelligence startup, earlier this week telling an interviewer that the graphics processing units (GPUs) are “considerably harder to get than drugs.”
But Nvidia Chief Executive Officer Jensen Huang on Wednesday said in a statement that the company is “significantly increasing our supply to meet surging demand” for its data center chips.
Analysts believe Nvidia reallocated some supply-chain capacity away from the slumping PC gaming market to its data center AI chips.
Nvidia forecast current-quarter revenue of $11 billion, plus or minus 2%. Analysts polled by Refinitiv are expecting revenue of $7.15 billion.
Adjusted revenue for the quarter ended April 30 was $7.19 billion. Analysts polled by Refinitiv were expecting revenue of $6.52 billion The company’s data center chip sales hit $4.28 billion, beating analyst estimates of $3.89 billion, according to segment data from FactSet.
Net income rose to $2.04 billion, or 82 cents per share, from $1.62 billion, or 64 cents per share, a year earlier. Excluding items, the company earned $1.09 per share in the first quarter, beating estimates of 92 cents
