Global technology shares rose on Thursday after Nvidia reported quarterly results that showed demand for artificial intelligence hardware remains strong, but concerns about the historic boom outpacing fundamentals still hang around. The chip company’s excellent results eased some worries over a potential AI bubble. But questions about the payoff from the massive spending boom remain.
Nvidia Stock Adds $243 Billion in Value
Nvidia shares rose by over 5 per cent at the opening of trading. If gains hold, the company will add about $243 billion to its market value, more than the worth of some major companies on the S&P 500 index, including PepsiCo and Goldman Sachs. The strong feeling lifted many tech stocks around the world. Shares of US chipmakers Advanced Micro Devices and Intel rose around 4 per cent and nearly 3 per cent, while Arm Holdings, Micron Technology and Broadcom rose between 1.5 per cent and 4 per cent.
The European tech index rose almost 1 per cent. ASML was up over 2 per cent. U.S.-listed shares of Taiwan’s TSMC surged almost 3 per cent. Across Asia, SK Hynix ended up almost 2 per cent. Japan’s Nikkei reclaimed the 50,000 mark once more as chip suppliers and AI-linked stocks rose.
CEO Says Demand Is Incredible
Investors felt good after Nvidia CEO Jensen Huang dismissed the notion of a bubble. He called the demand incredible and noted bookings extend into 2026. We see something very different from a fleeting hype cycle, he said. He pointed to Nvidia’s deep integration across cloud, enterprise and edge computing. Amid a swell of concern heading into this print, Nvidia delivered not just solid results and guidance, but a beat and raise that was even stronger than most had expected, J.P.Morgan analysts said.
To our thinking, this reflects strong execution across the vast and complex supply chain at Nvidia. To some, the company’s positive results were evidence that the AI boom was still on; to others, there were external risks the company faced, largely tied to its customers’ spending and financing, not to mention challenges in building out data centre capacity: Energy limits and memory chip shortages cause problems.
Some Worry About Customer Dependence
Nvidia heavily depends on a handful of customers, with the increasingly circular nature of some of its deals raising several concerns. AI startups struggle to turn a big profit to justify billions of dollars in funding. But Nvidia has been made special by its status as the face of the AI revolution. It is the only company in the world to have crossed the $5 trillion valuation mark. This was after its share price surged by over 1,190 per cent in the past three years.
Gains after earnings reversed its November losses, which moved the company’s shares nearly 2 per cent higher for the month. Its stock is up about 39 per cent this year. Nvidia’s forward price-to-earnings ratio stands at 28.44, which is below AMD’s 35.70 and far lower than Intel’s 62.38.
Revenue Growth Picks Up Again After Seven Quarters
The results marked Nvidia’s first acceleration in seven quarters. Surging data centre sales powered it. Revenue forecast topped estimates. Margins are expected to hold in the mid-70 per cent range through fiscal year 2027. Demand still beats supply, with cloud companies and server makers buying heavily, said Bob O’Donnell. He is the chief analyst at Technalysis Research.
The strong results show the AI boom is not slowing down yet. Companies are still spending huge amounts on AI hardware. Nvidia makes the chips that power most AI systems. When companies like Google, Microsoft and Amazon build AI, they buy Nvidia chips. This has made Nvidia one of the most valuable companies in the world. The stock price has gone up so fast that some people worry it cannot last. But Huang says demand keeps growing and will continue into next year and beyond.
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