Nvidia Soars on Strong AI Growth Projections Despite Supply Bottlenecks
Nvidia's shares rose sharply on Thursday after the chipmaker signaled that it expects years of rapid growth from AI spending, despite concerns about supply bottlenecks and financial ties with customers.
The company projected 70% revenue growth next fiscal year and forecast current-quarter sales above Wall Street estimates, sending a reassuring message to investors who had been demanding evidence that the AI spending boom would endure.
Nvidia's CEO Jensen Huang said that AI has reached an 'inflection point' as the technology moves from experimentation to real-world deployment. He cited growth from AI labs and rising capacity among neo-cloud providers such as CoreWeave and Nebius, as well as a deeper partnership with Amazon Web Services.
The forecast marked a rare long-term outlook from Nvidia, which has fallen nearly 12% from its May peak amid growing investor demands for evidence that the AI spending boom would continue. At least 10 brokerages raised their price target on the shares following the results.