Nvidia<\/a> forecast fourth-quarter revenue above Wall Street estimates on Wednesday, betting on booming demand for its AI chips from cloud providers against the backdrop of widespread concerns of an artificial-\u200bintelligence bubble.<\/p>\nThe results from the AI chip leader mark a defining moment for Wall Street, as global markets look to the \u200cchip designer to determine whether investing billions of dollars in AI infrastructure expansion has resulted in a valuation bubble that potentially outpaces fundamentals.<\/p>\n
The world’s most valuable company said it expected \u200cfiscal fourth-quarter sales of $65 billion, plus or minus 2%, compared with analysts’ average estimate of $61.66 billion, according to data compiled by LSEG.<\/p>\n
Shares of the AI market bellwether were up more than 4% in extended trading. Ahead of the results, doubts had pushed Nvidia’s shares down nearly 8% in November, after a surge of 1,200% in the past three years. The broader market \u2060has declined almost 3% this month.<\/p>\n
\u201cBlackwell sales \u200care off the charts, and cloud GPUs are sold out,\u201d CEO Jensen Huang said in a statement. \u201cThe AI ecosystem is scaling fast \u2014 with more new foundation model makers, more AI startups,\u200d across more industries, and in more countries. AI is going everywhere, doing everything, all at once.\u201d<\/p>\n
Sales in the data-center segment, which accounts for a majority of Nvidia’s revenue, grew to $51.2 billion in the quarter ended October 26. Analysts expected sales of $48.62 \u200bbillion, according to LSEG data.<\/p>\n
But some analysts noted that factors beyond Nvidia’s control could impede its growth.<\/p>\n
“While GPU demand continues to \u200cbe massive, investors are increasingly focused on whether hyperscalers can actually put this capacity to use fast enough,” said Jacob Bourne, an analyst with eMarketer. “The question is whether physical bottlenecks in power, land, and grid access will cap how quickly this demand translates into revenue growth through 2026 and beyond.”<\/p>\n
Nvidia’s business also became increasingly concentrated in its fiscal third quarter, with four customers accounting for 61% of sales. At the same time, it sharply ramped up how much money it spends renting back its own chips from \u2060its cloud customers who otherwise cannot rent them out, with those contracts totaling \u200b$26 billion – more than double their $12.6 billion in the previous quarter.<\/p>\n
Still,\u200b analysts and investors widely expect the underlying demand for AI chips, which has powered Nvidia’s results since ChatGPT’s launch in late 2022, to remain strong.<\/p>\n
Huang said last month the company has $500 billion in bookings for \u200dits advanced chips through 2026.<\/p>\n
Big Tech, \u2060among Nvidia’s largest customers, has doubled down on spending to expand AI data centers and snatch the most advanced, pricey chips as it commits to multibillion-dollar, multi-gigawatt buildouts.<\/p>\n
Microsoft<\/a> reported a record capital expenditure of nearly $35 billion for its fiscal \u2060first quarter last month, with roughly half of it spent primarily on chips.<\/p>\nNvidia said it expected adjusted gross margin of 75%, plus or minus 50 basis points,\u200c in the fourth quarter, compared with market expectations of 74.5%.<\/p>\n
(Reporting by Arsheeya Bajwa in Bengaluru and \u200cStephen Nellis in San Francisco; Editing by Arun Koyyur and Matthew Lewis)<\/p>\n","protected":false},"excerpt":{"rendered":"By Arsheeya Bajwa and Stephen Nellis (Reuters) –Nvidia forecast fourth-quarter revenue above Wall Street estimates on Wednesday, betting…\n","protected":false},"author":2,"featured_media":142428,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,85,46,4136,17582,125,69856],"class_list":{"0":"post-142427","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-il","12":"tag-israel","13":"tag-nvidia","14":"tag-revenue-growth","15":"tag-technology","16":"tag-wall-street-estimates"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/142427","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=142427"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/142427\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/142428"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=142427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=142427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=142427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}