Nvidia is riding high on a wave of AI-fueled optimism ahead of its first-quarter earnings report, and the buzz is warranted. Mega-cap tech titans have been singing Nvidia’s praises – both explicitly and implicitly – during their recent earnings calls. Key phrases centered around AI infrastructure and massive capital expenditures point directly toward growing demand for Nvidia’s sought-after H100 GPU chip.
The H100, a powerhouse with a hefty price tag exceeding $40,000, is the backbone of the groundbreaking generative AI platforms that drive applications like ChatGPT and its competitors. As the industry gears up for the release of Nvidia’s next-generation ‘Blackwell’ AI chip later this year, anticipation surrounding the company is reaching fever pitch.
Endorsement from an Industry Icon
Tesla CEO Elon Musk’s recent nod to Nvidia during his company’s earnings call served as a resounding vote of confidence for the AI chip leader. Musk revealed that Tesla had doubled its H100 GPU count to 35,000, with plans to reach around 85,000 by year-end. These massive numbers underscore the H100’s critical role in advancing Tesla’s Full Self-Driving software ambitions.
Tech Giants Open Their Wallets for AI
Meta Platforms (formerly Facebook) has dramatically upped the ante, raising its 2024 capital expenditure forecast into the $35-$40 billion range, from the previous $30-$37 billion estimate. Meta specifically cites “infrastructure investments to support our AI roadmap” as the driving force behind this increase. While the company announced a hefty 350,000 H100 GPU order back in January, recent comments from Meta’s head of AI suggest an additional 500,000 GPUs have been purchased. That brings Meta’s estimated total investment in H100 GPUs to a staggering $30 billion.
Microsoft’s AI ambitions are equally grand. An internal document reveals the company’s desire to build a formidable 1.8 million GPU stockpile by the end of 2024. Alphabet, Google’s parent company, experienced a near doubling of first-quarter capital expenditures to $12 billion. This surge was attributed overwhelmingly to “investment in our technical infrastructure with the largest component for servers followed by data centers.”
Amazon, though less specific with its CapEx plans, did signal an expectation for increased spending in the coming year. Amazon CFO Brian Olsavsky expressly mentioned “higher infrastructure CapEx to support growth in AWS, including generative AI” as the primary driver.
Industry Analysts Chime In
One of our analysts points out that the total combined capital expenditures of Microsoft, Alphabet, Meta, and Amazon could reach a staggering $205 billion in 2024. This marks a substantial 40% increase over 2023 levels. With AI innovation at the forefront, a sizable portion of these funds is likely earmarked for Nvidia’s H100 and future Blackwell AI chips.
While Nvidia faces competition from rivals like AMD and Intel, recent earnings demonstrate the company’s clear dominance. AMD’s projected $4 billion revenue from its MI300 AI chip in 2024 pales compared to Nvidia’s expected haul of over $100 billion. Intel’s recently launched Gaudi 3 AI chip is expected to generate a mere $500 million in sales this year.
Another analyst observes that these developments all point to a potential blowout earnings report for Nvidia when it releases its results on May 22nd. Whether the company can maintain its momentum in this rapidly evolving technological landscape remains to be seen.
