Nvidia stock surges as revenue forecast tops estimates, AI demand continues
By Arsheeya Bajwa and Max A. Cherney
(Reuters) -Nvidia on Wednesday forecast a roughly threefold surge in quarterly revenue that handily beat estimates as the company banked on towering demand for its industry-leading artificial-intelligence chips, sending its shares up 10% after-hours.
The already-hefty demand for the company's data center chips and graphics processing units (GPUs) continues to grow as firms scramble to expand their AI offerings. Nvidia (NASDAQ:NVDA)'s silicon dominates the global market for AI chips, where it counts the likes of Microsoft (NASDAQ:MSFT) among its customers.
«The market was poised to sell the news following Nvidia's earnings, given the sky-high expectations and deteriorating macro conditions,» Investing.com analyst Thomas Monteiro said. «However, once again, the company left no doubt that the AI boom is much more than just a stock market narrative, but rather, the most significant bet from corporations worldwide at this moment.»
The late-day stock jump lifted the market capitalization of the Santa Clara, California, company by more than $129 billion, and pushed up the shares of other AI-related companies including chip designer Arm Holdings (NASDAQ:ARM). Nvidia and other hardware suppliers linked to AI computing added $160 billion of combined stock market value.
Nvidia on Wednesday forecast first-quarter revenue growth of 233%, ahead of Wall Street expectations of 208% growth.
For the first three quarters of 2023, Nvidia reported quarterly revenue that beat analyst estimates by between 10% and 20%.
Some analysts raised questions about how long Nvidia will be able to sustain this pace of growth.
The company forecast revenue for the current quarter of $24.0 billion, plus or minus 2%.
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