Nvidia shares rise after after stronger-than-expected 3Q results
Posts on AI darling Nvidia There was a boom in pre-market trading after the US firm beat expectations in its third-quarter results after the closing bell on Wednesday.
Shares were last traded up 5.5% at 04:15 GMT.
Nvidia beat revenue estimates with a 62% year-over-year increase to $57.01 billion and issued a stronger-than-expected fourth-quarter sales forecast.
“There’s been a lot of talk about the AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call in which he explained the company’s outlook on the industry. “We’re seeing something very different from our perspective.”
Ben Barringer, head of global technology research and investment strategist at Quilter Cheviot, told CNBC’s “Europe Early Edition” that Nvidia brought relief in two parts: it beat gross margins, which is important for semiconductor stocks, but the firm also directly addressed market concerns in its earnings release.
“They’ve really researched and tried to debunk almost all the bear cases. They’ve talked about the laws of scaling, they’ve talked about all the different elements of demand, not just the hyperscaler capex, but the model demand they’re seeing from companies like OpenAI and Anthropic, software demand, enterprise demand, sovereign AI,” Barringer said.
Nvidia also touched on supply constraints, vendor financing, partnerships and China. “So they did a really great job of going through every elephant in the room, every possible bear case, and giving their perspective,” Barringer added.
Nvidia’s optimistic guidance helped boost investor sentiment on the AI trade, which has weakened in recent sessions due to rising valuations, debt financing and fears of potential chip depreciation. The results boosted a number of stocks in the AI ecosystem in the after-hours session, including chipmakers Advanced Micro Devices and energy infrastructure companies such as Broadcom and Eaton.
Asian chip stocks also rose on Thursday; Gains from Samsung Electronics and Hon Hai Precision Industry, also known as Foxconn, led the way.
— CNBC’s Pia Singh contributed to this report.
