Key Points
- CEO Jensen Huang dismissed AI bubble concerns, stressing pervasive AI demand.
- Nvidia reported record quarterly sales of $57 billion and profit near $32 billion.
- Shares rose about 5 percent after hours but remain below recent highs.
- Strategic investments include OpenAI, CoreWeave, xAI, and Anthropic.
- Data‑center products now account for roughly 90 percent of Nvidia’s revenue.
- Future sales forecast of $65 billion exceeds analyst expectations.
- Growth expected to slow to about 64 percent by fiscal year end.
Earnings Call Highlights
During Nvidia’s recent earnings call, CEO Jensen Huang directly addressed the “AI bubble” narrative that has been circulating among investors. He argued that, from Nvidia’s perspective, the situation is fundamentally different, asserting that artificial intelligence is permeating every industry and will require extensive GPU resources. Huang spent several minutes outlining how Nvidia’s products are essential across cloud, enterprise, robotics, and other sectors, reinforcing the company’s central position in the AI ecosystem.
Market Reaction
The comments came as Nvidia reported record quarterly sales and profit, yet the stock had experienced a roughly 10 percent decline after reaching an all‑time high in late October. Following the earnings release, Nvidia’s shares rose about 5 percent in after‑hours trading, though the rebound was insufficient to fully offset the recent sell‑off. Analysts noted the mixed response, recognizing both the impressive financial results and lingering investor caution.
Strategic Partnerships and Investments
Huang underscored Nvidia’s strategy of deep technical partnerships with leading AI developers. The company has invested heavily in OpenAI, CoreWeave, and Elon Musk’s xAI, aiming to support their accelerated growth and secure long‑term demand for Nvidia chips. Additionally, Nvidia announced a new investment in Anthropic, positioning the firm to bring Claude, Anthropic’s chatbot, onto Nvidia hardware for the first time. Huang emphasized that the number of customers and platforms approaching Nvidia is increasing, not decreasing.
Financial Outlook
Nvidia disclosed quarterly sales of $57 billion and profit of nearly $32 billion. The company projected $65 billion in sales for the current quarter, surpassing Wall Street’s $62 billion estimate. While Nvidia has more than doubled its annual revenue in each of the past two fiscal years, it expects growth to moderate to about 64 percent by the end of its fiscal year in January. Approximately 90 percent of Nvidia’s revenue now derives from its data‑center business, a shift from its earlier reliance on gaming GPUs.
Industry Context
The rapid surge in demand for Nvidia’s GPUs began after OpenAI released ChatGPT, catalyzing a massive increase in AI‑related workloads. Nvidia dominates the global GPU market, and its latest products continue to outpace supply. Some investors worry that the company’s aggressive buying back of shares and large‑scale investments could be unsustainable, while industry executives argue that close collaboration with Nvidia is essential for accessing cutting‑edge chips and technical support.
Source: wired.com