Nvidia Shares rose on Thursday as the chip giant’s earnings outlook reassured investors that demand for AI remains strong.
The stock was up 5.95% in pre-market trading.
Nvidia Chief Financial Officer Colette Kress said Wednesday that the company expects revenue to increase 70% in fiscal 2028, from February 2027 to January 2028. CEO Jensen Huang said demand is “well above 70%,” but there are constraints on the amount of product the company can supply.
TSMC, Nvidia’s main manufacturer continues to face supply constraints, and memory chips, a key component of Nvidia’s systems, also remain in short supply.
On Thursday, analysts also pointed to a “threat” to Nvidia’s near monopoly on cutting-edge AI chips from hyperscalers and custom semiconductors recently announced by AI labs like OpenAI.
Nvidia’s stock price since the beginning of the year.
Nvidia boosts AI optimism
Huang said NVIDIA “never predicted” a year in advance, but the company has “been able to predict” it across its supply chain.
Nvidia’s forecast comes as investors remain nervous about big tech companies’ capital spending, the cyclical nature of their financing deals and returns from AI investments.
Comments from tech giants about the demand for AI appear to have allayed some of those fears.
Huang said AI has “reached an inflection point,” noting that the number of enterprises requiring large GPU clusters is increasing dramatically.
“This time last year, only one lab was pushing for ramp-up,” Huang said. “Today, we are in a golden age of new AI labs and startups, with multiple frontier labs expanding in parallel, an open model ecosystem thriving, physical AI coming online, and momentum spreading across the United States and around the world.”
The company also sought to show investors that its revenue base is diversifying its customer base beyond just hyperscalers. Nvidia’s AI Cloud, Industrial, and Enterprise (ACIE) customers had revenue of $40.3 billion in the quarter, up 138% on an annual basis.
Sidi Job, senior portfolio manager of Econopolis Wealth Management’s Exponential Technologies Fund, told CNBC’s “Squawk Box Europe” on Thursday that Nvidia’s results “speak to the cheap valuation today.” “NVIDIA stock has a lot of upside.”
Concerns about a market correction were heightened in July when semiconductor stocks fell $1 trillion before recovering, but bullish views appear to be back on the table after Nvidia reported its results.
“I remain very bullish on Nvidia and this whole ecosystem,” Paul Meeks, head of technology research at Freedom Capital Markets, told CNBC’s “Squawk Box Asia” on Thursday. “I don’t think there’s a real threat of a slowdown until we get into 2028 early.”
