Nvidia Corp shares were set to hit a record high in early trading after the chipmaker at the forefront of an industrywide artificial intelligence (AI) race delivered a third-straight sales forecast that surpassed Wall Street estimate.
Shares rose 8.7% to $512 before markets in New York opened on Thursday after Nvidia said sales will be about $16 billion in the three months ending in October. If the gain holds, it will mark a record. Analysts had estimated just $12.5 billion, according to data compiled by Bloomberg. Nvidia’s results last quarter also blew past projections, and it approved an additional $25 billion in stock buybacks.
The outlook underscores Nvidia’s role as the key beneficiary of the AI computing boom. Faced with skyrocketing demand for chatbots and other tools, data centre operators are stocking up on the company’s processors, which are adept at handling the heavy workloads required by artificial intelligence. That’s helped Nvidia quickly pull out of an global chip slump and accelerate sales growth to its fastest rate in years.
“A new computing era has begun,” Chief Executive Officer Jensen Huang said. Companies around the world are shifting to more powerful computing that can handle ChatGPT-style generative AI, he said.
The gains add to a more than threefold increase for the stock this year. Shares closed at $471.16 in New York before Nvidia released its quarterly report. In the fiscal second quarter, which ended on July 30, revenue doubled to $13.5 billion, the company said. Profit was $2.70 a share, minus certain items. Analysts had predicted sales of about $11 billion and profit of $2.07.
Nvidia became the first-ever semiconductor company to rack up a $1 trillion market valuation after another blowout quarter in May.