Nvidia shares jumped more than 6% in premarket trading Thursday after the artificial-intelligence chip leader delivered stronger-than-expected quarterly results and projected $108 billion in revenue for the current quarter, reassuring investors that the massive global buildout of AI infrastructure remains intact.
The rally spread across the semiconductor sector, lifting shares of Micron, Arm and Intel. Nvidia's stock had initially slipped following the earnings release as investors weighed the sustainability of AI spending, but management's outlook and comments during the earnings call shifted attention back toward accelerating demand.
Nvidia reported revenue of more than $96 billion, topping analysts' expectations of about $92 billion. Earnings per share came in at $2.22, compared with the $2.10 analysts had projected, while data-center sales also exceeded Wall Street forecasts.
For the current quarter, Nvidia projected revenue of $108 billion, above the roughly $104.2 billion analysts had expected. Chief Financial Officer Colette Kress also said the company expects revenue growth of 70% in fiscal 2028, providing investors with an unusually strong signal that management expects the AI investment cycle to extend well beyond the current year.
Chief Executive Jensen Huang said the limiting factor isn't demand but Nvidia's ability to produce enough computing systems. Taiwan Semiconductor Manufacturing Co., Nvidia's primary manufacturing partner, faces supply constraints, while shortages of memory chips are adding another bottleneck.
Huang said underlying demand is "much greater" than the amount Nvidia can currently supply. His comments suggest the company's growth trajectory increasingly depends not only on orders from customers but also on how quickly the semiconductor supply chain can add advanced manufacturing, packaging and memory capacity.
The Nvidia CEO argued that AI has "reached its inflection point," pointing to a widening customer base that now stretches beyond the handful of giant technology companies that initially dominated spending on generative AI infrastructure.
"This time last year, one lab alone was driving the buildout," Huang said. "Today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online, with strong momentum across the U.S. and around the world."
That diversification is important for Nvidia as Wall Street scrutinizes whether hundreds of billions of dollars flowing into AI infrastructure will eventually produce adequate returns. Investors have become increasingly sensitive to capital-expenditure plans at the largest technology companies, particularly as Google and Meta continue committing enormous sums to computing capacity.
A sharp semiconductor selloff in July reflected those concerns. Nvidia and other chip stocks struggled to regain momentum as investors questioned whether AI spending could continue rising at its recent pace without a corresponding increase in revenue generated from AI services.
Results from Microsoft, Amazon and Google have since helped ease some of those fears. Growth in their cloud-computing businesses has provided evidence that companies continue to consume substantial amounts of AI capacity even as investors demand clearer signs that infrastructure spending can translate into sustainable earnings.
Nvidia is also trying to reduce its dependence on a relatively small group of hyperscale cloud customers. Management said revenue is increasingly coming from a broader collection of companies, while the chipmaker is expanding its role beyond supplying graphics processors into financing and developing the infrastructure in which those processors operate.
Earlier this month, Nvidia announced a partnership with BlackRock, Blackstone, KKR, Apollo Global Management, Brookfield and Goldman Sachs aimed at creating financing platforms that could mobilize more than $500 billion in third-party capital for AI infrastructure.
