Shares in AI darling Nvidia popped in premarket trade after the U.S. firm beat expectations in third-quarter results after the closing bell on Wednesday.
Shares were last trading 5.5% higher at 4:15 a.m. ET.
Nvidia topped forecasts for revenue, which jumped 62% to $57.01 billion year-on-year, and issued stronger-than-expected fourth-quarter sales guidance.
“There’s been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call, as the firm set out its view of the industry. “From our vantage point, we see something very different.”
Quilter Cheviot’s Ben Barringer, who is the global head of technology research and investment strategist, told CNBC’s “Europe Early Edition” that Nvidia brought relief in two-parts: it beat gross margins, which is important for semiconductor stocks, but the firm also addressed market concerns head-on in its earnings call.
“They really went through and sort of tried to disprove pretty much all of the bear cases out there. They talked about scaling laws, they talked about all the different elements of demand, not just hyperscaler capex, but the model demand that they’re seeing from companies like OpenAI and Anthropic, software demand, enterprise demand, sovereign AI,” Barringer said.
Nvidia also addressed supply constraints, vendor financing, partnerships and China. “So they really did a stand up job of calling out every elephant in the room, every every possible bear case, and going through and giving their perspective on it,” Barringer added.
Nvidia’s upbeat guidance helped lift investor sentiment around the AI trade, which has weakened in recent sessions amid fears about elevated valuations, debt financing and potential chip depreciation. The results boosted a slew of stocks across the AI ecosystem in the after-hours session, including chipmakers Advanced Micro Devices and Broadcom and power infrastructure companies such as Eaton.
Asia chip stocks also rallied on Thursday, with Samsung Electronics and Hon Hai Precision Industry, also known as Foxconn, leading gains.
— CNBC’s Pia Singh contributed to this report.