Nvidia announced another quarter of astounding growth, exceeding analyst expectations and projecting continued 'skyrocketing' demand for its AI chips, yet investors remain divided on whether the AI boom is sustainable or heading for a 'comedown' after a multi-trillion dollar market surge.
AI chipmaker Nvidia reported an astounding quarter of growth, sparking investor debate on whether the AI craze is overblown hyperbole or a springboard into a new era of prosperity. The company's forecast exceeded analyst projections, with CEO Jensen Huang reinforcing that demand for Nvidia's chips is still 'skyrocketing,' aligning with his thesis that the AI boom is in its early stages. Nvidia anticipates a 77% revenue increase from last year for the February-April period, indicating an accelerating growth rate. Despite these stellar results and a rosy outlook, many investors are concerned about a potential market correction after Nvidia's market value soared from $400 billion to nearly $4.8 trillion in three years. The stock's initial 4% rise after earnings backtracked, reflecting persistent skepticism even with positive news. Major AI players — Amazon, Microsoft, Google parent Alphabet, and Facebook parent Meta Platforms — have committed approximately $650 billion this year to ramp up AI computing power, with a significant portion expected to fund Nvidia chip purchases. This demand has propelled Nvidia's annual revenue from $27 billion to $216 billion, with analysts projecting over $330 billion for the next fiscal year as Huang aims to position Nvidia at the forefront of this new computing era.
