Nvidia’s latest results have reignited investor confidence in the artificial intelligence boom, sending chip stocks sharply higher after the company issued an unusually strong long-term revenue outlook.
Nvidia shares jumped 6.8% on Thursday, potentially adding around $295.7 billion to its market value in a single session. The rally came after Nvidia forecast a 70% increase in revenue for its next fiscal year, easing concerns that the massive AI infrastructure spending cycle may be losing momentum.
The company also beat expectations for both revenue and profit in the second quarter, while strong demand for its next-generation Rubin AI processors further strengthened its outlook.
The positive sentiment spread across the semiconductor sector, with Intel, Micron, Broadcom and SK Hynix among the major beneficiaries. AI-focused cloud companies including CoreWeave and Nebius also gained.
Investors had previously been concerned about the sustainability of Big Tech’s enormous data-centre spending, Nvidia’s financial involvement with some of its customers, and the growing development of alternative AI chips by companies such as OpenAI.
However, Nvidia’s latest forecast suggests that AI infrastructure investment could remain elevated for much longer than previously expected.
At least 16 brokerages raised their price targets for Nvidia following the results, according to LSEG data.
Author
About the Author
