Nvidia profits soar, soothing investor jitters over AI boom

Nvidia reported record sales and strong guidance Wednesday, helping soothe jitters about an artificial intelligence bubble that have reverberated in markets for the last week.

- Robbie Whelan

The chip maker reported record revenue, beating Wall Street estimates and increasing current-quarter guidance.

(REUTERS)

Sales in the October quarter hit a record $57 billion as demand for the company’s advanced Al data center chips continued to surge, up 62% from the year-earlier quarter and exceeding consensus estimates from analysts polled by FactSet. The company increased its guidance for the current quarter, estimating that sales will reach $65 billion—analysts had predicted revenue of $62.1 billion for the quarter.

Shares in the world’s most-valuable publicly-listed company rose as much as 6.5% in after-hours trading Wednesday.

“We've entered the virtuous cycle of Al,” said Nvidia Chief Executive Jensen Huang at THE WALL STREET JOURNAL. “Al is going everywhere, doing everything, all at once.”

Wednesday's result will allow investors to breathe a sigh of relief. Each Nvidia quarterly earnings report has come to be seen as a financial Super Bowl of sorts as the AI boom has taken off. The company is regarded as a bellwether for both the health of the tech industry and the market as a whole.

This quarter, however, the stakes seemed higher. Rarely has an earnings report from a single company been greeted with such nervous anticipation.

In recent weeks, investors have sold off big tech names , worried that companies are spending far too much money on data centers, chips, and other infrastructure in the race to design and operate the world’s most powerful AI models, with little hope of recouping their investments in the near term.