Nvidia smashes expectations as AI demand ‘shows no signs of slowing’
Nvidia shares jumped by over four per cent in after-hours trading, after the chipmaker delivered another blockbuster set of quarterly results.
The tech behemoth comfortably beat Wall Street forecasts that reinforced the strength of the global AI boom.
For the three months to 26 October, Nvidia reported earnings of $1.30 (£1.04) per share, ahead of expectations for $1.26, as revenue surged 62 per cent year-on-year to $57.01bn.
Wall Street analysts had pencilled in $55.19bn.
The data-centre division, its engine of AI infrastructure investment, once again drove performance, with revenue up 66 per cent to $51.2bn.
This means it beat Wall Street expectations of $49.34bn.
Elsewhere, gaming revenue rose 30 per cent to $4.3bn, slightly below consensus.
Jensen Huang, Nvidia’s foundr and chief executive, said demand remained “off the charts”, adding: “Compute demand keeps accelerating and compounding across training and inference – each growing exponentially. We’ve entered the virtuous cycle of AI.”
The upbeat numbers lifted semiconductor stocks more broadly, including AMD, Intel and Broadcom.
A high stakes test for the sector
Nvidia’s results had been seen as a critical barometer for whether the recent pullback in AI-linked stocks marks a healthy reset or the first crack in what some fear is a so-called AI bubble.
Nvidia shares remain down around ten per cent this month amid anxiety over stretched valuations.
But the company’s guidance gave the market fresh confidence.
Nvidia forecast fourth quarter revenue of $65bn, plus or minus two per cent, far above analysts’ expectations of $61.98bn.
Analysts broadly praised the behemoths’ results.
Dan Albano at Tech Cache said Nvidia remains the “kingpin of AI”, while Hargreaves Lansdown’s Matt Britzman said the firm continues to carry “the weight of the world” but stands firm under immense expectations.
Others were more cautious, with Morningstar’s Kenneth Lamont pointing to the unpredictable trajectory of AI adoption, noting that today’s market leaders rarely hold their position indefinitely.
Nvidia also declared a quarterly dividend of $0.01 per share, payable on 26 December.