(Bloomberg) — Nvidia Corp. Delivers Eye-Popping Sales Forecast
Nvidia Corp. rose the most in about nine months after the chipmaker delivered another eye-popping sales forecast, adding fresh momentum to a stock rally that already made it the world’s most valuable chipmaker.
Record Sales Forecast
Revenue in the current period will be about $24 billion, the company said in a statement Wednesday. Analysts had predicted $21.9 billion on average. Results in the fourth quarter also sailed past Wall Street estimates.
AI Accelerators Driving Demand
The outlook extends a streak of Nvidia shattering expectations, thanks to insatiable demand for its artificial intelligence accelerators — highly prized chips that crunch data for AI models. The technology has helped power a proliferation of chatbots and other generative AI services, which can create text and graphics based on simple prompts.
Market Response
The shares jumped 16% to $785.38 as the close Thursday in New York, a record high and the biggest single-day increase since May. Nvidia’s market capitalization has now increased by more than $650 billion this year — bringing its valuation to $1.89 trillion — as investors bet that the company will remain the prime beneficiary of an AI computing boom.
Industry Impact
That turned Wednesday’s report into a highly anticipated event for both Wall Street and the tech world. And the numbers — along with the upbeat tone from Huang — renewed confidence that spending will stay strong. Shares of other chipmakers expected to benefit from AI growth also gained on Thursday.
New Cycle
On a conference call with analysts, Huang said that demand for Nvidia’s newest products will continue to outstrip supply for the rest of the year. Though supply is growing, demand isn’t showing any signs of slowing, he said.
Company Growth
“Generative AI has kicked off a whole new investment cycle,” Huang said. That will lead to a doubling of the world’s data center installed base over the next five years and “represent an annual market opportunity in the hundreds of billions,” he said.
