The world’s most valuable company has reported another series of expectation-beating results, heading off fears of an end to the AI bubble, for now.
Nvidia had revenue of $57bn in the three months to October, higher than Wall Street estimates and the company’s own guidance.
A profit measure called earnings per share was also better than expected at $1.30.
It matters as Nvidia has powered the artificial intelligence (AI) boom through its computer chips, which are key parts in AI chatbots such as ChatGPT.
It counts major tech companies as clients and so acts as a good proxy for whether the tens of billions of dollars invested in AI is paying off.
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Its chief executive, Jensen Huang, has been described as the Godfather of AI and watch parties have been organised for those looking to follow the results announcement.
The company has been a massive beneficiary of the push to put money into AI, with its share price reaching stratospheric highs.
In October, it became the first worth $5trn (£3.83trn), about the size of the German economy, Europe’s largest, and double the UK’s benchmark stock index, the FTSE 100.
What’s been announced?
Revenue from data centres reached a record high of $51.2 bn, more than £10bn higher than the three months previous.
The outlook is for continuing strong sales in the final three months of the financial year, with sales forecast by the company to be roughly $65bn.
Why it matters
Developing AI infrastructure, like the construction of data centres, has been a significant contributor to US economic growth, as measured by gross domestic product (GDP).
A faltering of AI expansion, therefore, impacts the US economy, the world’s largest, which in turn affects the UK and global economies.
Anxiety around the massive valuations tech companies have accrued on the hope of AI revolutionising the world is likely to be staved off.
A fall in these valuations could mean a drop in the value of pension pots or savings.
Just seven dominant tech companies, many of which have borrowed to invest in AI, make up more than a quarter of major US stock index, the S&P 500.
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In the last year alone, Nvidia’s share price has risen more than 230%.
What next?
Regardless of the figures released on Wednesday evening, significant market moves are anticipated, given the attention paid to the results and the significance of the company.
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For now, the AI bubble remains intact.
