Due to strong demand for its advanced chips that drive artificial intelligence, Nvidia’s stock rose on Wednesday after the company exceeded quarterly earnings projections.
The strong results coincide with Wall Street analysts’ growing concerns about an AI bubble, and all eyes are on Nvidia, the industry’s bellwether, to weather the storm.
Nvidia CEO Jensen Huang stated, “There’s been a lot of talk about an AI bubble,” during an earnings call. “From our vantage point, we see something very different.”
Jensen reasoned that businesses all over the world are moving away from traditional CPU-based computing devices and software and toward AI-infused systems that require graphics processing units (GPUs), which are Nvidia’s specialization.
According to Jensen, software programs are also quickly adjusting to the AI era, and there is a trend of AI “agents” that can handle computer tasks on their own.
“Nvidia is chosen because our singular architecture enables all three transitions across every phase of AI,” stated Jensen.
Our clients are responsible for their own finance. We’ve seen growth opportunities for a long time.”
According to Jensen, AI is already benefiting internet behemoths in the form of enhanced recommendation engines and efficiencies.
“The internet has trillions of pieces of content,” stated Jensen.
Unless they have extremely advanced recommender systems to do it effectively, how could they possibly determine what to put in front of you on your tiny screen? That has gone generative AI.”
Despite concerns about how the expenditures would pay off, rivals in the AI sector have been investing billions of dollars in Nvidia’s highly valued GPUs to power the technology.
Nvidia’s earnings were described by Wedbush analyst Dan Ives as a “pop the champagne” moment for the tech industry and an indication that concerns about an AI bubble are unfounded.
Nvidia’s shares increased by more than 5% after the company reported a $31.9 billion profit on record-high quarterly revenue of $57 billion.
According to financial figures, it also made almost 60% more money during the quarter than it did during the same period last year.
Huang stated, “Blackwell sales are off the charts, and cloud GPUs are sold out,” alluding to the company’s most recent model of cutting-edge hardware.
With more AI businesses, foundation model creators, sectors, and nations, the AI ecosystem is expanding quickly.”
The current quarter’s revenue is predicted to be $65.0 billion, which is over $3 billion more than Wall Street analysts had predicted.
Nvidia’s division dedicated to GPUs for data centers generated the majority of the revenue during the most recent quarter.
Based on the quantity of outstanding shares, Nvidia was valued at about $4.5 trillion.
During that time, Anthropic will use Nvidia’s most recent systems to adopt one gigawatt of computing capacity, and Nvidia announced strategic partnerships with OpenAI to deploy at least ten gigawatts of systems for next-generation AI infrastructure.
Beijing has responded to U.S. President Donald Trump’s trade dispute with China by raising national security concerns about Nvidia processors and advising Chinese companies to use local suppliers instead.
According to chief financial officer Colette Kress, sales of H-20 GPUs, which are intended for the Chinese market because of US prohibitions on AI chip exports to that nation, totaled just $50 million for the quarter.
“Sizable purchase orders never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China,” Kress stated in an earnings conference call.
“To establish a sustainable leadership position in AI computing, America must win the support of every developer and be the platform of choice for every commercial business, including those in China.”
