In some cases, financial performance metrics alone have a decisive influence on the dynamics of stock prices following the release of an issuer’s quarterly report, but Nvidia’s recent events have more to do with the traditional eloquence of the company’s founders. He was able to convince investors that the artificial intelligence craze was continuing, and Nvidia shares rose nearly 9% in yesterday’s trading session.
Image source: NVIDIA
At the same time, it cannot be said that “dry reported numbers” did not contribute to this, because Nvidia’s revenue doubled last quarter, and management hedged against the risk of a possible decline in the stock price, announcing that revenue could increase by 70% next year, while demand increased by 100%. Huang Renxun also said that there is no need to worry about the so-called bubble in the artificial intelligence market, because its accelerators will be useful no matter what. Nvidia’s stock price rose 9% at the end of trading yesterday, securing a $440 billion increase in the company’s capital, as Nvidia highlighted CNBC. Following Nvidia, shares of Broadcom, Intel and Nebius also rose.
Apparently, it’s the medium-term forecast of revenue dynamics, which is usually unusual for Nvidia management, that can ease investors’ nerves and instill in them the idea that the AI market bubble is still far from bursting. Huang said the development of artificial intelligence has reached a “tipping point” and the number of companies requiring large computing power has increased dramatically. He said that a year ago, the demand for data centers was actually driven by a laboratory. Now many competitors have joined, including many start-ups and market veterans, while the demand for computing power is driven by the field of “physical artificial intelligence” – the field of robotics. Nvidia leaders are convinced that demand is growing not only in the United States but also abroad.
A change in the company’s reporting structure was also made to convince investors, with the enterprise cloud solutions segment being separated out and showing a 138% increase in revenue to $40.3 billion. It is true that gaming graphics cards are in a sense a victim of market conditions, but they still receive very few comments from the company’s CFO. Experts at Freedom Capital Markets believe that the slowdown in the AI infrastructure market will not occur until 2028. Nvidia’s investment activities are also making progress – it is reported that it plans to spend $12.9 billion to acquire the Hugging Face platform. This deal should create a certain symbiosis in the ecosystem of open source artificial intelligence models and help further the development of Nvidia’s own business.
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