tech
Nvidia gave its first-ever year-ahead forecast—a 70% growth bombshell meant to silence AI bubble critics and ‘circular financing’ doomsayers
Nvidia jolted investors on Wednesday with a projection that its revenue would skyrocket by 70% next fiscal year and said demand for its AI chips is growing at 100%, prompting an after-hours stock rally.
TL;DR
- Nvidia forecast a 70% revenue increase for the next fiscal year, far surpassing previous estimates.
- Demand for Nvidia's AI chips is reportedly growing at 100%.
- The company cited supply chain constraints as a limiting factor for even higher potential growth.
- Nvidia's quarterly earnings also exceeded expectations, with revenue reaching $96.2 billion.
- Massive demand is coming from hyperscale cloud providers and non-hyperscalers like sovereign AI, neoclouds, and AI startups.
- The increasing use of AI agents, which consume significantly more compute power, is driving demand.
- Nvidia defended its substantial investments in AI labs, calling them low-risk, high-reward opportunities essential for ecosystem growth.
- The company disclosed significant financial commitments and guarantees related to AI infrastructure and partners.
- Concerns about 'circular financing' and its impact on Nvidia's risk profile were addressed by the CFO.
- Gross margin guidance was set at 74% for Q3, with expectations to settle around 72%-73% next fiscal year.
- Rising memory costs are impacting the supply chain, but Nvidia has secured long-term agreements with suppliers.