[SAN FRANCISCO] Nvidia CEO Jensen Huang on Wednesday (August 27) dismissed concerns about the end of the AI chip spending boom, saying opportunities will expand to a trillion dollar market over the next five years.
Despite Huang's positive view on AI demand, Chip Designer's stock fell 1.56% to US$178.77 in pre-market trading on Thursday, as the company's third quarter sales forecast investor.
The sales outlook excluded potential revenues from China. This is a move that underscores the uncertainty caused by China's trade tensions.
Huang tried to reassure investors that signs of slowing growth in chipmakers at the heart of the investment frenzy have rattled investors.
The founder and CEO's bullish outlook contrasts with recent signs of fatigue in stocks focused on AI and comments from industry leaders on overheated investors' enthusiasm.
“A new industrial revolution has begun. AI race has begun,” fans said. “By the end of the decade, we'll see USD3 to USD4 trillion AI infrastructure spending.”
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Pushing up the chipmaker's stocks is an expectation for demand from major engineers from Hyperscalar and data center owners known as China.
“Megacaps are what drive many of the shelves that Nvidia benefits from. But obviously Nvidia is still growing so they can be sold.”
“If anything, this merely emphasizes that there is a lot of durability in this (AI) transaction… these hyperschool businesses can continue to accelerate, and we don't see any signs of slowing as reflected in nvidia's results.”
Nvidia's stocks outpace earnings of around 10% in the broader market, while stocks heading towards AI show signs of fatigue. Openai CEO Sam Altman left the alarm bell this month when investors said they might be “overly excited” about AI.
On Wednesday, Huang sounded unshakable.
“The more you buy, the more you grow,” Huang argued that Nvidia's technological advances allow customers to process more data while using less energy. “The buzz is: Everything is sold out.”
A good case: Non-China customers purchased Nvidia's H20 reduction capacity chip worth US$650 million for the Chinese market in the recent quarter, the chipmaker said.
Huang is based on forecasts in part on the US$600 billion they expect from major customers such as Microsoft and Amazon to capital spending in data centers this year.
For data centers up to USD 60 billion, Nvidia could win around USD 35 billion, Huang said.
However, Nvidia and Huang believe there is little reason for AI chip profit growth to slow, as second-quarter net profits outweighed third-quarter profits from major technology PierApple.
The company's high-end blackwell chips are primarily spoken based on 2026 forecasts from its largest customers. The previous generation of hopper processors have also been snapped.
“When there's something new and it's growing so fast, and with the announcement of all the huge equipment from hyperscalers, it's proof that it's in the early stages of the AI boom,” Reuters
