Nvidia has defied fears of an artificial intelligence (AI) bubble after the US tech giant reported a boom in sales.
On Wednesday, the microchip group said sales swelled 62pc for the three months ending October to $57bn, outstripping analyst forecasts of $55bn. It predicted sales over the next three months of $65bn, far ahead of Wall Street expectations.
Nvidia chief executive Jensen Huang claimed the company was “sold out” of many of its most powerful chips and said sales of its powerful Blackwell processors were “off the charts”.
Huang added: “There’s been a lot of talk about an AI bubble. From our vantage point we see something very different.”
The results will serve to quell investor jitters that a boom in AI stocks threatened to turn to bust after a sharp sell-off in major tech businesses over the past week.
Nvidia’s market valuation briefly hit $5 trillion in October with surging demand for its advanced AI processors from Silicon Valley giants making the graphics chip business the most valuable company in the world.
However, it has since suffered a sell-off, losing more than $500bn in market value.
Investors have been closely watching Nvidia’s performance amid concerns about a bubble in tech stocks.
It has increasingly been seen as a bellwether of the US technology boom, with Silicon Valley giants ordering hundreds of billions of dollars worth of chips to power their AI tools and data centres.
Nvidia shares climbed more than 4pc in after-hours trading after rising more than 2.8pc ahead of Wednesday night’s results. It reported net income of $32bn, up 65pc. Its data centre chip sales climbed 66pc to $51.2bn.
Nvidia’s shares have soared over the past two years with its chips critical to developing and powering AI tools such as OpenAI’s ChatGPT. Its chips are set to be at the heart of a multi-trillion dollar spending spree promised by US technology giants as they build sprawling data centres across the world to power their AI products.
Businesses such as OpenAI, Meta and Elon Musk’s X have ordered hundreds of thousands of Nvidia’s advanced graphics processing units.
These are being deployed in vast numbers in data centres across the US. Some of these data hubs, each of which houses tens of thousands of Nvidia’s Blackwell chips, are intended to be the size of a small city and will have dedicated supplies of natural gas or nuclear power.
However, Nvidia’s shares have been rocked by US trade tensions with Beijing, with the White House imposing a series of export restrictions on Nvidia’s chip sales to China.
Despite being effectively cut off from China, its sales have continued to surge on booming demand from domestic Silicon Valley giants.
Mr Huang said that demand for its chips showed no signs of slowing. “Compute demand keeps accelerating and compounding across training and inference,” he said. “AI is going everywhere, doing everything, all at once.”
Signing off...
Thank you for following our Nvidia coverage. We will have more of the latest business and economic news here.
Nvidia’s chief executive dismisses AI bubble fears
Nvidia’s boss has hit back at the notion that stock markets have become overvalued due to an AI bubble.
Speaking on a call with investors, Jensen Huang, Nvidia’s chief executive, said: “There’s been a lot of talk about an AI bubble. From our vantage point we see something very different.”
Mr Huang added that AI is currently at a “tipping point” that will lead to accelerated growth in the future.
AI tech is already improving productivity at top firms, Nvidia CFO says
AI technologies are boosting productivity at some of America’s leading companies, Nvidia’s finance chief has said.
Speaking to investors, Colette Kress, Nvidia’s chief financial officer, said AI tools are already providing significant gains at companies including Salesforce and Unilever.
Nvidia makes the high-tech microchips used by virtually all of the major AI companies, meaning they are often viewed as a bellwether for the health of the industry.
Strong results to quell investors’ jitters
Nvidia’s results will serve to quell investor jitters that a boom in AI stocks threatened to turn to bust after a sharp sell-off in major technology businesses over the past week.
The chipmaker’s market valuation briefly hit $5 trillion in October with surging demand for its advanced AI processors from Silicon Valley giants, making the graphics chip business the most valuable company in the world.
However, it has since suffered from a sell-off in technology stocks, losing more than $500bn in market value.
Nvidia shares were up by more than 4pc in the post-market trading session after it posted its results.
Nvidia boss says high-tech chip sales are “off the charts”
Nvidia’s chief executive Jensen Huang has said sales of its high-tech Blackwell chips are “off the charts” in a sign that the boom in AI technologies will continue.
“Blackwell sales are off the charts, and cloud GPUs are sold out,” said Mr Huang, who started Nvidia in 1993.
Mr Huang said the strong sales of the cutting edge chips used for AI technologies shows growth in the industry is continuing, despite fears over a possible speculative bubble.
“We’ve entered the virtuous cycle of AI,” Mr Huang said. “The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”
Nvidia smashes expectations with $57bn revenues
Nvidia has smashed through market expectations, reporting more than $57bn in revenues and suggesting the AI boom is not over yet.
The graphics chip giant’s shares climbed after it recorded a 62pc jump in revenues, while it forecast $65bn in sales in the next three months, far ahead of analyst forecasts.
Nvidia expecting $500bn AI chip boom
Nvidia has already booked $500bn in revenues over the next 15 months as it rides apparently insatiable demand for its AI chips, its chief executive said last month.
Speaking at an Nvidia conference in October, Mr Huang claimed the business was seeing “extraordinary growth” for its latest Blackwell processor chips.
“I think we’re probably the first company in history to have visibility into half a trillion dollars” of sales, he said. “This is how much business is on the books.”
Nvidia has signed a series of deals with AI labs, data centre operators and tech giants such as Meta to deliver hundreds of thousands of advanced processors.
However, some of its tie-ups have attracted scrutiny over their apparently circular nature - with Nvidia agreeing to take equity in AI start-ups in exchange for deals to buy its processors.
Major tech giants have also leaned into taking on tens of billions in debt to buy its chips in the expectation that booming demand for AI will only continue.
Nvidia’s AI deals treated with ‘increasing caution’
Nvidia’s blockbuster run of hundreds of billions of dollars in AI deals are being treated with “increasing caution” by investors, analysts at Deutsche Bank have said.
In one tie-up confirmed yesterday, Nvidia said it would be investing $10bn in AI lab Anthropic, a rival to OpenAI. In return, Anthropic had pledged to buy $30bn in capacity with Microsoft - which in turn would be powered by Nvidia’s chips.
However, Deutsche’s analysts said this deal was particularly notable as “unlike several recent AI deals which led to an immediate rally, there wasn’t a reaction in the share price of either following the news” after weeks of exuberance.
“It goes to show how sentiment has turned more negative in the last few weeks, with the circular AI deals being treated with increasing caution as the conversation around a potential bubble has gathered pace.”
AI boom or bust ‘starts and ends with Nvidia’, says analyst
You will be able to hear a “pin drop” on Wall Street trading desks this evening as investors await Nvidia’s blockbuster results, one analyst has said.
Dan Ives, of Wedbush Securities, said that the boom in AI stocks “starts and ends with Nvidia”, leaving investors glued to its results which represent a bellwether for the health of the technology industry - and the wider US economy.
Nvidia is a foundational piece of this AI Revolution and we expect Nvidia will handily exceed Street estimates given the plethora of positive data points we have picked up,” Ives said.
“We continue to believe Street estimates for Nvidia are being significantly underestimated over the next few years.”
US stocks rebound as investors await Nvidia
Nvidia’s shares were up by more than 2.5pc on Wednesday as investors awaited the graphics chip-makers results later this evening.
The California chip maker led a rally in stocks on Wall Street, which boosted big technology companies including Oracle and Google-owner Alphabet.
The surge helped lift America’s main stock indexes, in what saw the S&P 500 increase by 0.3pc following four consecutive days of losses.
The Nasdaq Composite index, which is home to many of America’s most valuable tech giants, also climbed 0.6pc following an initial surge earlier in the day.
The gains come after a week of selling by investors who have become increasingly nervous that tech valuations are overblown.
Nvidia expected to reveal $55bn in chip sales
Nvidia is poised to report nearly $55bn in graphics chip sales this evening with investors nervously watching for signs that a multi-trillion dollar bubble in artificial intelligence (AI) stocks is reaching breaking point.
The world’s most valuable company, which develops AI chips that power apps such as ChatGPT, will disclose its quarterly results at 9pm today with traders pricing in a share price swing of as much as 8pc.
The US graphics chip giant has surged on the back of a boom in demand for its AI processors, briefly hitting a $5 trillion valuation in October.
However, its value has since dropped by more than $500bn on a widespread tech sell-off amid investor jitters that AI valuations are increasingly disconnected from reality.
Nvidia has already forecast a surge in its sales to more than $54bn over the past three months, with analysts predicting a 56pc jump to as much as $55bn. It is also expected to forecast sales over the current quarter of about $62bn, according to analysts, up 58pc.
However, investors will be anxious over any signs that demand for Nvidia’s advanced processors is weaker than expected. Its chips have been central to powering a wave of AI infrastructure, with tech giants promising to spend hundreds of billions of dollars on its processors over the coming years.
The Telegraph will be following Nvidia’s results live and its upcoming analyst call.