Key Points:
- Nvidia expects 78 billion dollars in first-quarter revenue.
- Fourth-quarter sales surged 73 percent to reach 68.1 billion dollars.
- Shares rose slightly as investors worry about an artificial intelligence bubble.
- The company secured supply agreements to handle customer demand through 2027.
Nvidia delivered another massive sales forecast this week, but investors reacted with caution. The dominant artificial intelligence chipmaker gave a first-quarter revenue outlook of about 78 billion dollars. This number easily beat the 72.8 billion dollars that financial analysts expected. For the fourth quarter, the company reported a 73 percent jump in revenue, hitting 68.1 billion dollars.
Despite these huge numbers, Nvidia shares rose just 1 percent in early trading. Over the past year, explosive growth turned the California company into the most valuable business in the world. Now, shareholders worry the artificial intelligence boom might turn into a bubble. They question if tech companies will keep spending billions on chips once they finish training their large software models.
Chief Executive Officer Jensen Huang dismissed these fears during a Wednesday call. He argued that clients are already making real money from their new computing power. Because of this, he expects them to keep investing heavily to drive their own growth.
Chief Financial Officer Colette Kress also reassured investors about production limits. She stated that Nvidia locked down enough inventory and supply agreements to meet customer demand well into 2027. She specifically noted that the current Blackwell chips and the upcoming Rubin line will exceed previous sales targets.
However, outside challenges remain. A global shortage of memory chips hurts the entire tech industry. Kress admitted this supply crunch currently restricts Nvidia’s gaming division, and she does not know when the problem will ease.
Furthermore, the company faces deep uncertainty in China. The United States approved licenses to ship some H200 processors there, but Nvidia still needs approval from the Chinese government. The company currently leaves Chinese data center revenue out of its forecasts.
To prove the market remains strong, Nvidia points to massive new contracts. Meta recently agreed to buy millions of Nvidia processors over the next few years to power its own tools.
