Global markets rose after Nvidia posted third-quarter earnings that exceeded Wall Street estimates, easing concerns about AI sector valuations.
The chipmaker reported US$1.30 in diluted earnings per share on US$57.01bn in total revenues, beating investor expectations of US$1.26 on US$54.9bn.
Sales increased 62 per cent year on year.
Nvidia, the world’s most valuable publicly traded company, has become a bellwether for the artificial intelligence industry.
The company reported US$51.2bn in revenue from data centre sales, exceeding expectations of US$49bn.
Jensen Huang, founder and chief executive of Nvidia, addressed concerns about an AI bubble during the earnings call.
He said: “There’s been a lot of talk about an AI bubble.
“From our vantage point, we see something very different. As a reminder, Nvidia is unlike any other accelerator.
“We excel at every phase of AI from pre-training to post-training to inference.”
The company projected fourth-quarter revenue of about US$65bn, above analysts’ predictions of US$61bn.
Huang identified three major platform shifts driving demand: transition from general purpose computing to accelerated computing, transition to generative AI, and transition to agentic and physical AI including robots and autonomous vehicles.
“As you consider infrastructure investments, consider these three fundamental dynamics,” Huang said.
“Each will contribute to infrastructural wealth. Nvidia enables all three transitions and does so for any form or modality of AI.”
He added that demand for the company’s chips continues to grow: “AI is going everywhere, doing everything, all at once.”
Shares in Nvidia rose more than 5 per cent in post-market trading, with S&P 500 and Nasdaq futures also climbing.
Nvidia, which last month became the world’s first US$5tn company, helped Asian markets rally on Thursday following the announcement.
Shares in Nvidia have been down 7.9 per cent in November after major investors sold stock in the firm.
Peter Thiel’s hedge fund, Thiel Macro, sold its entire stake in the last quarter, with holdings valued at about US$100m according to Reuters. SoftBank also divested its US$5.8bn holding.
Thomas Monteiro, senior analyst at Investing.com, said: “This answers a lot of questions about the state of the AI revolution, and the verdict is simple: it is nowhere near its peak.
“As investors worry that mounting CapEx will force companies to slow their AI adoption cycles, Nvidia continues to prove that data centre scaling is not optional, but rather the central need for every tech business in the world.”
However, some analysts remain cautious about long-term sustainability. S
tephen Innes of SPI Asset Management said: “Nvidia’s latest forecast has, for now, dulled the sharpest edges of the AI-bubble anxiety that had gripped global markets.
“But make no mistake: this is still a market balancing on a wire stretched between AI euphoria and debt-filled reality.”
