In a letter written on July 6, 1799, the French envoy Louis-Guillaume Otto used an expression to describe the great changes taking place around him.
He chose the words “Industrial Revolution,” and historians say this is the earliest recorded use of the term, marking the tumultuous period when machines began to replace the work of human hands.
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Cities grew as people moved away from farms to work in factories. And the era saw the rise of innovations such as the steam engine, the telegraph and the electric generator.
“It is undoubtedly the most important event in the history of humanity since the domestication of animals and plants, perhaps the most important since the invention of language,” said the professor at the University of Illinois at Chicago. Deirdre McCloskey he wrote in 2004.
And now the world seems headed for another cultural upheaval, as artificial intelligence is likely to impact almost every blessed thing people do.
Nvidia CEO: “We are changing what computers can do”
NVIDIA (NVDA) the biggest name in the massive ai shift with a market cap of $2.6 trillion, released a spectacular fiscal first-quarter report Wednesday night.
“The next industrial revolution has begun,” said Jensen Huang, CEO of chipmaker ai in Santa Clara, California. told analysts during Nvidia's earnings call.
“Companies and countries are partnering with Nvidia to shift the trillion-dollar installed base of traditional data centers to accelerated computing and build a new type of data center, ai factories, to produce a new product, artificial intelligence“.
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Huang, who co-founded the company in 1993, said that “ai will bring significant productivity gains to nearly every industry and help companies become more cost- and energy-efficient, while expanding revenue opportunities.”
Nvidia earned $6.12 per share, well above the analyst consensus estimate of $5.60. Revenue tripled (up 262%) year over year to $26.04 billion, easily beating market forecasts of $24.59 billion.
Data center revenue, which includes the company's key ai offerings, increased more than five-fold from a year earlier to a record $22.6 billion, while the group's gross margin expanded to 78.9% .
“From the current information retrieval model, we are moving to a computer model of response and skill generation,” Huang said. “ai will understand the context and our intentions, have knowledge, reason, plan and perform tasks.”
Nvidia said current quarter revenue would rise to about $28 billion, with a margin of error of 2%, even as it said its new Blackwell system of processors and software would not begin shipping until the second half.
However, Huang said customers can “easily transition from H100 to H200 to B100,” adding that “Blackwell systems have been designed to be backward compatible.”
“We are fundamentally changing how computing works and what computers can do,” he said.
To be sure, there are skeptics who believe the ai revolution is little more than a bunch of hype, but they're hard to find on Wall Street.
Analyst cites Nvidia confidence
Analysts responded enthusiastically to Nvidia's numbers, with one stating that the group “is such a unique growth property that investors will continue to support the company's premium valuation multiples.”
The street professionals Chris Versace He raised his price target in Nvidia's earnings report to $1,250 from $1,100 following the company's results.
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“To improve results and guidance, Nvidia announced a 10-for-1 stock split effective June 7 and an increase in its dividend to $0.01 per share after the split,” Versace said.
“We'll admit that the dividend appears to be more of a show when you look at it on a per-share basis, but when you look at Nvidia's upcoming share count, it's equivalent to returning $1 billion a year to shareholders versus $100 million. before the stock split,” he added.
Versace, who began his career in equity research before founding Versace Management in 2005, has an MBA from Fordham Gabelli Business School. He is the co-author of a book titled “Cocktail Investing-Distilling Everyday Noise into Clear Investing Signals for Better Returns.”
“While we can't call Nvidia a dividend stock, that move speaks to the company's confidence in its business prospects as we move beyond the early stages of ai adoption,” he said.
Versace noted that rising data center revenue reflected higher shipments of the Nvidia Hopper GPU computing platform.
The platform is used for training and inference with large language models, recommendation engines, and generative ai applications in enterprise and consumer Internet companies.
He added that, with around 87% of revenue, the data center segment “is the clear driver of Nvidia's revenue and profits and should continue to benefit from increased spending on artificial intelligence and data centers by companies such as big technology companies and others.
“As generative ai makes its way into more consumer Internet applications, we expect to see that translate into demand for ai computing,” he said.
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