Off the charts demand for AI chips powers strong third quarter for Nvidia, calming worries of AI bubble | Latest Tech News
Nvidia CEO Jensen Huang touted “off the charts” demand for its superior laptop chips as the tech titan reported strong third-quarter outcomes on Wednesday – a major aid for traders who have fretted about a potential AI bubble.
The AI chip giant also supplied strong fourth-quarter steering, indicating it expects gross sales of $65 billion – greater than the $61.66 billion predicted on Wall Street, according to LSEG data.
The outcomes have been anticipated to regular markets, which have been wobbly in latest days over considerations that tech shares are overvalued and AI firms have overspent on the fledging technology, with little income to show for it.
Jensen Huang’s Nvidia forecast fourth-quarter income above Wall Street estimates on Wednesday, betting on booming demand for its AI chips from cloud suppliers against the backdrop of widespread considerations of an AI bubble. REUTERS
“Blackwell sales are off the charts, and cloud GPUs are sold out,” Huang said in a assertion, referring to Nvidia’s most superior chips.
“The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”
Nvidia shares surged 4% in after-hours trading on the strong outcomes.
Its efficiency is seen as a essential bellwether since the tech industry’s greatest gamers – including OpenAI, Amazon, Microsoft, Google and Meta – rely on Nvidia’s chips to energy their data facilities and AI fashions.
“Nvidia earnings are such an important event both because of the weighting that the stock has in the major equity indices and because it is ground zero for the entire artificial intelligence build out,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
Huang with President Trump and Elon Musk at the US-Saudi Investment Forum in Washington on Wednesday. AFP via Getty Images
In the third quarter, Nvidia posted earnings of $1.30 per share, besting the $1.25 estimated by analysts. The company’s total income was $57.01 billion, which also got here in forward of expectations and was up 22% in contrast to the same quarter one yr in the past.
The company’s data heart unit, which offers the bulk of its income, booked gross sales of $51.2 billion for the quarter.
Looking forward, Nvidia said it expects an adjusted gross margin of 75% in the current quarter, which was barely forward of an anticipated 74.5%.
Last month, Huang said Nvidia already has $500 billion in chip offers on the books through 2026.
Nevertheless, fears about Nvidia’s outlook mounted in the days forward of its earnings release after Japanese investment giant Softbank and billionaire tech investor Peter Thiel each dumped all of their stakes in the company. That jumpstarted considerations that Nvidia shares have been overvalued.
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