Nvidia Earnings Clear Lofty Hurdle

Nvidia reported more eye-catching numbers for its fiscal third quarter Wednesday, with net income jumping 65% and revenue increasing 62% from a year earlier. The results may ease recent jitters about a Big Tech boom turning into a bust that topples the world's most valuable company, the AP reports. The results announced late Wednesday provided a pulse check on the frenzied spending on AI technology that has been fueling both the stock market and much of the overall economy since OpenAI released its ChatGPT three years ago.

Nvidia has been by far the biggest beneficiary of the run-up because its processors have become indispensable for building the AI factories that are needed to enable what's supposed to be the most dramatic shift in technology since Apple released the iPhone in 2007. But in the past few weeks, there has been a rising tide of sentiment that the high expectations for AI may have become far too frothy, setting the stage for a jarring comedown that could be just as dramatic as the ascent that transformed Nvidia from a company worth less than $400 billion three years ago to one worth $4.5 trillion today.

Nvidia's report for its fiscal third quarter covering the August-October period now seems likely to elicit a sigh of relief among those fretting about a worst-case scenario. The company's stock price gained more than 4% in Wednesday's extended trading after the numbers came out. Nvidia earned $31.9 billion, or $1.30 per share, a 65% increase from the same time last year, while revenue climbed 62% to $57 billion. Analysts polled by FactSet Research had forecast earnings of $1.26 per share on revenue of $54.9 billion.

What's more, the company predicted its revenue for the current quarter covering November-January will come in at about $65 billion, nearly $3 billion above analysts' projections, in an indication that demand for its AI chips remains feverish. The incoming orders for Nvidia's top-of-the-line Blackwell chip are "off the charts," Nvidia CEO Jensen Huang said in a prepared statement that described the current market conditions as "a virtuous cycle." The company's stock price gained more than 5% in Wednesday's extended trading after the numbers came out.