Nvidia shares surge 9 per cent as strong AI demand boosts revenue outlook

Mumbai: Nvidia’s AI boom is showing no signs of cooling. Shares of Nvidia jumped nearly 9 per cent on Thursday, adding around $440 billion to the chipmaker’s market value after its latest revenue outlook reinforced investor confidence in continued demand for AI infrastructure.

The rally could break a recent post-results pattern for Nvidia. Its shares had fallen the day after earnings in each of the previous four quarters, even when the company met or beat Wall Street expectations.

This time, investors appear to have focused on the longer-term outlook. Nvidia chief financial officer Colette Kress said the company expects revenue to grow by 70 per cent in fiscal 2028, which runs from February 2027 to January 2028.

Chief executive officer Jensen Huang went a step further, saying demand is currently running ahead of that pace. Nvidia’s ability to increase sales, however, is being constrained by supply rather than a lack of customers.

Huang said the company now has greater visibility across its supply chain, enabling Nvidia to provide a forecast a year ahead for the first time.

The upbeat outlook comes at a time when investors have been questioning whether the enormous sums being spent on AI infrastructure will generate sufficient returns. Concerns have also centred on how AI companies are being financed and whether the current investment cycle can continue.

Nvidia’s latest commentary appears to have offered some reassurance. Huang said AI has reached an inflection point, with an increasingly broad range of companies and AI laboratories building large computing clusters.

He also pointed to growing activity among startups, frontier AI laboratories, developers of open models and companies working on physical AI.

Nvidia’s growth is also spreading beyond the biggest cloud providers. Its AI Clouds, industrial and enterprise customer business generated $40.3 billion in quarterly sales, up 138 per cent year on year.

The chipmaker, however, is not without challenges. Its dominance in advanced AI chips is facing potential competition from custom semiconductors being developed by major technology companies and AI laboratories, including OpenAI.

Nvidia is also looking to deepen its position beyond chips and into the software side of AI. The company has reportedly agreed to acquire open-source AI platform Hugging Face for $12.9 billion, according to The Information, while Business Insider has separately reported that the companies had been in talks.

If completed, the deal would bring one of the leading platforms for sharing and developing open-source AI models into Nvidia’s ecosystem.

For now, investors appear to be rewarding Nvidia for something more fundamental than another strong quarter: confidence that the AI infrastructure spending cycle still has plenty of runway.