Nvidia's upbeat forecast calms AI bubble fears

Chip giant expects sales of $65 billion in January quarter; CEO says AI will help maintain demand for its products

- BLOOMBERG

Nvidia Corp delivered a surprisingly strong revenue forecast and pushed back on the idea that the Al industry is in a bubble, easing concerns that had spread across the tech sector.

The world’s most valuable company expects sales of about $65 billion in the January quarter — roughly $3 billion more than analysts predicted. Nvidia also said that a half-trillion-dollar revenue bonanza due in coming quarters may be even bigger than anticipated.

The outlook signals that demand remains robust for Nvidia's artificial intelligence accelerators, the pricey and powerful chips used to develop AI models. Nvidia had faced growing fears in recent weeks that the runaway spending on such equipment wasn’t sustainable. “There’s been a lot of talk about an AI bubble,” Chief Executive Officer Jensen Huang said on a conference call with analysts. “From our vantage point, we see something very different.”

The upbeat commentary sent shares up about 5 per cent in late trading. They had gained 39 percent this year through the close, leaving the company’s market value at $4.5 trillion.

Nvidia results have become a barometer for the health of the AI industry, and the news lifted a variety of related stocks. CoreWeave Inc, a provider of AI computing, gained more than 9 per cent in extended trading. Its peer Nebius Group NV climbed more than 8 percent.