Nvidia results show spending on A.I. infrastructure remains robust

Summary

Nvidia, the artificial intelligence chipmaker, was crowned the world’s first $4 trillion public company last month and has become perhaps the most important factor determining the direction of the stock market.On Wednesday, the Silicon Valley company reported results that showed that spending on A.I. infrastructure remains robust, easing the anxieties of Wall Street and investors around the world.Concerns over whether tech companies would continue shelling out billions to build A.I. data centers — spending that has helped prop up the economy — had mounted in recent months. But Nvidia’s sales rose 56 percent to $46.74 billion in the three months that ended in July, just topping Wall Street’s expectations. Profit increased more than 59 percent to $26.42 billion.Revenue in the current quarter is projected to rise 54 percent from a year ago to $54 billion, as tech companies pour money into data centers. The forecast was in line with Wall Street’s prediction for $53.9 billion, but the company said its estimates did not include any sales for China, which would lift its revenue higher.“The last year, A.I. has made tremendous progress,” Jensen Huang, Nvidia’s chief executive, said during a call with analysts. He said the company’s chips would benefit as spending on A.I. infrastructure increased to $3 trillion to $4 trillion by the end of the decade.“We’re in the beginning of this build-out,” he said.Shares of Nvidia fell more than 2 percent in after-hours trading. The decline, even when the company now posts quarterly profits bigger than tech peers like Apple and Meta, spoke to how lofty the expectations are. The company’s board approved a plan to repurchase $60 billion of its stock, signaling its confidence in its prospects. Nvidia’s results have been closely watched since OpenAI released its ChatGPT chatbot in late 2022, igniting an A.I. boom. The company’s fortunes have soared as tech companies have flocked to buy its chips, which are ideal for powering the development o...