It wins slightly on revenue forecasts, but not enough to surprise the market
CEOs forecast $3-4 trillion AI infrastructure spending at end of the decade
Nvidia's AI chip demand remains strong amid market fatigue
SAN FRANCISCO, Aug. 27 (Reuters) – NVIDIA CEO Jensen Huang on Wednesday dismissed concerns about the end of the spending boom on artificial intelligence chips.
Huang tried to reassure investors that signs of slowing growth in chipmakers at the heart of the investment frenzy have rattled investors. Earlier in the day, Nvidia forecasts third quarter revenue meeting analyst estimates, but this year it has not reached its high expectations, with about a third of its share price rise.
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 $3 to $4 trillion of AI infrastructure spending.”
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) trade… 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 surpassed an approximately 10% increase 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. “Buzz: Everything is sold out.”
A good case: Non-China customers purchased NVIDIA's H20 reduction capacity chip worth $650 million in recent quarter, targeting the Chinese market, chipmaker said.
Huang is based on forecasts based on the $600 billion they expect from major customers such as Microsoft and Amazon to capital spending this year in data centers.
For data centers up to $60 billion, Nvidia could win around $35 billion, Huang said.
Huang's comments contrast with third-quarter sales forecasts for lukewarm vision of around $54 billion, slightly above the analyst estimate compiled by LSEG.
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 as is, and with all the announcements of the giant CAPEX from Hyperschool, there's evidence that it's in the early stages of AI BOOM, says Thomas Martin, portfolio manager of Globalt Investments. (Reporting by Max A. Chernie of San Francisco, edited by Peter Henderson, Sayantani Gausch and Christopher Cushing)
