Nvidia has reported quarterly earnings that surpassed Wall Street’s predictions, alleviating concerns about high spending in the artificial intelligence (AI) sector. In its earnings report for the three months ending in October, Nvidia announced a revenue increase of 62%, reaching $57 billion, primarily due to rising demand for its chips used in AI data centers. Sales from this particular segment rose by 66% to over $51 billion.
The company also provided fourth-quarter sales forecasts in the range of $65 billion, which exceeded market expectations and resulted in a more than 3% increase in Nvidia’s shares during after-hours trading. As one of the leading companies in AI technology, Nvidia’s financial performance is viewed as indicative of broader market trends in the sector.
Chief Executive Jensen Huang noted that sales of their AI Blackwell systems were exceptionally strong and that demand for cloud graphics processing units (GPUs) had resulted in them selling out. The heightened attention on Nvidia’s report comes amid increasing worries that AI stocks may be overvalued, which had contributed to declines in the S&P 500 index leading up to the earnings release.
With a significant expectation of $500 billion in AI chip orders anticipated over the next year, investors are looking for clarification on when these revenues may materialize and how Nvidia plans to meet the orders. Major technology companies are intensifying their investments in AI, aiming to capitalize on the boom that has driven stock prices to new heights. Reports from firms such as Meta, Alphabet, and Microsoft indicate substantial expenditures on various aspects of AI infrastructure.
Sundar Pichai, CEO of Alphabet, acknowledged the rapid growth of AI investment as remarkable but also indicated potential irrationality in the current AI market trends, highlighting ongoing concerns from industry leaders.
Source: https://www.bbc.com/news/articles/cly4y2enywro?at_medium=RSS&at_campaign=rss