Nvidia has defied fears of an artificial intelligence (AI) bubble, reporting a surge in sales that has sent shockwaves through the tech industry. The US graphics chip giant posted a 62% jump in revenue for the three months ending October, raking in a staggering $57 billion – well ahead of analyst forecasts of $55 billion.
Nvidia’s chief executive, Jensen Huang, dismissed concerns over an AI bubble, stating: “There’s been a lot of talk about an AI bubble. From our vantage point we see something very different.” The company’s results will serve to quell investor jitters that a boom in AI stocks could be turning 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 as demand for its advanced AI processors from Silicon Valley giants soared, making it the most valuable company in the world. However, it has since suffered a significant sell-off, losing more than $500 billion in market value.
Investors have been closely watching Nvidia’s performance amid concerns about a potential bubble in tech stocks. The company has increasingly been seen as a bellwether for 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’s data centre chip sales climbed 66% to $51.2 billion, underscoring the insatiable demand for its cutting-edge processors. The company’s chief financial officer, Colette Kress, revealed that AI technologies are already providing significant productivity gains at major companies like Salesforce and Unilever.
Nvidia shares climbed more than 4% in after-hours trading after rising more than 2.8% ahead of Wednesday night’s results. The company reported net income of $32 billion, up 65%. Analysts have praised Nvidia’s performance, with Dan Ives of Wedbush Securities stating that the “boom in AI stocks starts and ends with Nvidia”.
Despite being effectively cut off from China due to US trade tensions, Nvidia’s sales have continued to surge on booming demand from domestic Silicon Valley giants. Huang said that demand for its chips showed no signs of slowing, declaring that “compute demand keeps accelerating and compounding across training and inference. AI is going everywhere, doing everything, all at once.”
