Nvidia Shares Surge 9% After Forecasting 70% Sales Growth As AI Chip Demand Accelerates

Nvidia has delivered a bullish outlook for its next fiscal year, projecting 70% sales growth, well above the 45% expansion expected by analysts. The forecast sent the artificial intelligence chipmaker’s shares up 8.7% to $227.98, adding around $442 billion to its market value in a single session.

According to a report by Bloomberg, the company’s strong projection has eased some investor concerns about whether the massive spending on artificial intelligence infrastructure could be approaching a peak.

Nvidia remains the leading supplier of specialised processors used to train and operate AI models, making its financial results an important indicator of the health of the wider AI industry.

AI Chip Demand Continues to Accelerate

Nvidia executives said demand remains exceptionally strong, with customers indicating that growth could accelerate further next year. CFO Colette Kress said the company could expand even faster if additional supply were available.

CEO Jensen Huang also highlighted the rollout of Nvidia’s latest Vera Rubin chip platform, saying the company’s AI infrastructure build-out was continuing at full pace.

For the current quarter, Nvidia expects revenue of around $108 billion, slightly above the $105.2 billion analysts had forecast. Gross margin is projected at approximately 74%.

However, rising memory costs are expected to put pressure on margins in the near term. Nvidia expects gross margin to fall to between 71% and 72% in its fiscal fourth quarter before stabilising at around 72%-73% in fiscal 2028.

Data Centre Business Drives Record Results

Nvidia’s second-quarter revenue more than doubled year-on-year to $96.2 billion, while adjusted earnings reached $2.22 per share, exceeding analyst expectations.

The company’s crucial data-centre division generated $89 billion in revenue, ahead of the $85.8 billion consensus estimate. Major cloud companies, including Amazon and Google, accounted for a significant share of demand.

Nvidia is also working to broaden its customer base and reduce dependence on a relatively small number of technology giants. The latest results suggest that, despite concerns about an AI investment bubble, spending on computing infrastructure remains robust.