Nvidia is growing rapidly by virtue of AI

Nvidia is gaining from its strategic location at a time when demand for its GPU chips to power massive language models and other AI-driven tasks is high.

It was simple to be swept up in the euphoria when Nvidia revealed staggering profits on Wednesday with three-digit year-over-year increase. The company's revenue for the quarter was $13.5 billion, exceeding guidance of $11 billion and increasing by 101% over the same period last year. There is definitely cause for excitement there.

Nvidia is gaining from its strategic location at a time when demand for its GPU chips to power massive language models and other AI-driven tasks is high. In turn, this is fueling Nvidia's phenomenal growth this quarter.

“Data center compute revenue nearly tripled year over year, driven primarily by accelerating cloud demand from cloud service providers and large consumer internet companies for our HGX platform, the engine of generative and large language models,” Colette Kress, executive vice president and chief financial officer of Nvidia, said in the post-earnings report call with analysts.

This kind of growth harkens back to the heyday of cloud stocks, when several of them surged as businesses boosted their usage of SaaS to keep their staff connected during the pandemic lockdown. Particularly Zoom took off during that time, seeing five quarters of truly amazing growth.