Nvidia’s third-quarter financial results on Wednesday topped analyst expectations, a sign that demand for its artificial intelligence chips remains robust amid investor concerns about an AI bubble.
The chipmaker reported record revenue of $57 billion for the third quarter, up 22% from the previous quarter and up 62% from a year ago. Earnings per share were $1.30. The Santa Clara, Calif., company had been expected to earn $1.26 per share on revenue of $54.9 billion for the quarter, according to analysts polled by FactSet.
“Blackwell sales are off the charts, and cloud GPUs are sold out,” Nvidia CEO Jensen Huang said in a statement on Wednesday.
In October, the chipmaker became the first publicly listed company worth $5 trillion, with its shares buoyed by Wall Street expectations of surging demand.
But in recent weeks, some investors have expressed caution about the hype surrounding AI and whether the soaring market value of companies linked to the technology is warranted. Despite the promise of AI, most companies that are implementing AI have yet to see a measurable increase in productivity or profits, according to Wall Street analysts.
The company’s results were driven by demand for Nvidia’s Blackwell graphics processing unit chips, which could help convince investors “that this AI spending trend is an unparalleled moment in modern tech history and is not a bubble moment,” Wedbush Securities analyst Dan Ives said.
The construction of data centers across the U.S. has boosted demand for Nvidia’s chips. Data center investment, which includes spending on AI research and development, has become the largest contributor to U.S. growth this year, according to S&P Global.
The S&P 500’s 15% gain this year has been driven largely by big tech companies with AI investments. The combined market capitalization of the so-called “Magnificent 7” — Google-owner Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — accounts for 37% of the index’s total value, according to Morningstar.