Tesla Partner Nvidia Speeds To Record High On ‘Superhuman’ AI
Nvidia ‘s ( NVDA ) AI technology with Facebook ( FB ), Alphabet ( GOOGL ) and Microsoft ( MSFT ) is powering “superhuman” levels of inference, or artificial intelligence, Nvidia CEO Jen-Hsun Huang said Thursday, after the Tesla Motors ( TSLA ) partner blasted Q1 views on record deep-learning sales. “The truth is that nobody really knows how big this deep-learning market is going to be,” Huang said on the company’s earnings conference call. He referred specifically to gains that customer Microsoft was making with AI and deep learning. “The work that recently was done at Microsoft Research, they’ve achieved superhuman levels of inferencing … of image recognition and voice recognition that’s really kind of hard to imagine,” he said, “and these networks are now huge.” In midday trading on the stock market today , Nvidia stock was up more than 14% and hit an all-time high at 40.30. Main graphics chip rival Advanced Micro Devices ( AMD ) was up nearly 3% midday Friday. IBD’s 41-company Electronic Semiconductor-Fabless industry group was up 1.5%. Nvidia late Thursday said its Q1 data center sales, which includes AI, soared 63% year over year to a record $143 million. Nvidia’s chips power IBM ( IBM ) Watson and Facebook’s Big Sur server, Huang said. Amazon.com ( AMZN ), Alibaba ( BABA ), Baidu ( BIDU ) and Twitter ( TWTR ) also use its AI technology. “Twitter has recently said they use Nvidia GPUs (graphics processing units) to help users discover the right content among the millions of images and videos shared every day,” Huang said, adding he can’t imagine a future Internet without deep learning. For Q1, Nvidia reported $1.3 billion in sales and 33 cents earnings per share, up 13% and 38% year over year, respectively. Both metrics topped Wall Street views for $1.26 billion and 32 cents. Nvidia Gaming Gains Seen Ahead Automotive sales grew 43% to $113 million, offsetting weaker growth in Nvidia’s core gaming and professional gaming segments — up a respective 17% to $687 million, and 4% to $189 million. But MKM analyst Ian Ing sees Nvidia’s gaming unit getting a robust refresh in the second-half of the year when it releases its new Pascal GPU, replacing the outmoded Maxwell units. The GPUs will be sold for $699 vs. the Maxwell 980 Ti at $682. “Nvidia continues to be our top pick, given the imminent Pascal gaming refresh and GPUs having unique exposure to a long list of promising applications that are outperforming PCs and smartphone opportunities,” he wrote in a research report. Despite continued headwinds in the PC and smartphone markets, “gaming continues to appear to have macro immunity,” he wrote. Ing reiterated his buy rating on Nvidia stock and boosted his price target to 43 from 39. For the current quarter, Nvidia expects $1.35 billion in sales, plus or minus 2%, up 17% at the midpoint vs. the year-earlier quarter. Rosenblatt analyst Kinngai Chan called the guidance “conservative” despite likely seasonal headwinds and a maturing product line. “We did not see any meaningful market share shifts and continue to see a benign pricing environment,” he wrote in a report.