Amid ongoing debates about artificial intelligence (AI) overvaluation, Nvidia, the leading stock of the AI industry, has silenced critics with record-breaking financial results. Wall Street and global investors are breathing a sigh of relief following Nvidia’s earnings announcement.
On Wednesday, Nvidia reported a staggering 62% year-over-year increase in third-quarter revenue, reaching 57 billion USD and surpassing market expectations of 55 billion USD. The data center division, accounting for 90% of total revenue, hit a record 51.2 billion USD, up 66% from last year. Gaming division revenue rose 30% year-over-year to 4.3 billion USD but saw a slight 1% dip from the previous quarter.
Earnings per share (EPS) came in at 1.30 USD, beating the projected 1.25 USD. Nvidia expects this growth trajectory to continue, forecasting fourth-quarter revenue of 65 billion USD, well above the market’s 62 billion USD estimate.
Nvidia CEO Jensen Huang declared that the world has entered a virtuous cycle for AI. He stated, “AI is going everywhere, doing everything, all at once,” and noted that sales of cutting-edge chips crucial for AI systems like OpenAI’s ChatGPT are “off the charts.” Nvidia CFO Colette Kress added that half of the company’s long-term growth potential lies in customers’ rapid adoption of accelerated computing and generative AI.
Addressing recent AI overvaluation concerns, Huang asserted that the situation he sees is entirely different. In fact, investors have been offloading big tech stocks, worried about excessive spending on AI infrastructure and the challenges of short-term returns on these investments.
SoftBank Group led by Chairman Masayoshi Son, sold its entire stake in Nvidia worth 5.8 billion USD last week to redirect funds to other AI investments. Additionally, billionaire venture capitalist Peter Thiel’s hedge fund divested 100 million USD in Nvidia stock. Michael Burry, famous for predicting the subprime mortgage crisis, is now betting against Nvidia and Palantir, an AI-heavy defense analytics firm.
Daniel Newman, CEO of The Futurum Group, commented, “These results prove AI’s momentum remains robust. The demand is almost unbelievably stable and strong, but eventually, even the skeptics will have to concede this reality.”
