Nvidia stock increases following a modest beat, powered by AI chips.

After the company disclosed slightly higher revenue and net income than Wall Street anticipated, Nvidia stock increased by more than 8% in extended trading on Wednesday despite a year-over-year decline in both categories. For the quarter ending in January, the chipmaker performed as expected based on Refinitiv consensus forecasts as follows:

EPS: $0.88, adjusted, versus $0.81 expected. Contrary to forecasts, revenue came in at $6.05 billion.

Nvidia posted a GAAP net income per share of $0.57. In its first quarter, Nvidia projected sales of $6.5 billion, greater than the $6.33 billion predicted by Wall Street. Nvidia has come to be regard by investors as one of the chip stocks best position to withstand an economic slowdown that hurts sales of PCs and semiconductors. Even though both revenue and profits were down from last year’s $1.32 per share and $7.64 billion in sales.

According to Nvidia’s data center division, which sells AI chips. The company may continue to reap significant benefits from programs with artificial intelligence like ChatGPT and Microsoft Bing’s AI chatbot. The graphics engines from Nvidia are excellent for running and training machine learning programs.

Before the results announcement on Wednesday, the stock had increased by about 45%. According to Nvidia CEO Jensen Huang, the “inflection point” in AI is driving companies of all kinds to purchase Nvidia chips to create machine learning software.

According to Huang, the versatility and power of generative AI have made it urgent for businesses worldwide to create and implement AI plans.

The data center segment of Nvidia’s business accounts for most of its purchases of GPUs for artificial intelligence. Revenue from data centers grew 11% yearly to $3.62 billion. According to the business, U.S. cloud service providers increased their purchases due to development. Given the recent spike in sales, a decline in gaming revenue was to be anticipate. The pandemic prompted players to update their systems with new graphics cards from suppliers like Nvidia. But sales have drastically decreased in recent months.