There's a lot more air to blow into the AI bubble, that's what snap analysis says following last night's update from Nvidia Corp (NASDAQ:NVDA, XETRA:NVD).
Put in more nuanced parlance by Dan Ives, the closely followed analyst at West Coast US stockbroker Wedbush, the latest blockbuster numbers from Nvidia show it is 'a 1996 moment, rather 1999'.
In other words, if there is an AI bubble, it's some way away from bursting yet.
Ives reckons Nvidia's results and guidance are a key validation point for the AI investment cycle.
Nvidia’s 65% revenue growth forecast for the next quarter “blew away” market expectations and helped ease recent investor concerns, the analyst highlighted.
In a note, Wedbush noted that capital spending by major tech firms is proving quickly profitable. Moreover, the broker believes the AI sector is now in year three of a decade-long expansion.
And what that means for Nvidia, which Ives calls the central enabler of the AI rollout, will be yet more upside. The analyst today says Nvidia will "enter the $6 trillion market cap club over the next 12 to 18 months".
Spelling out the opportunity, the analyst said: “There is one company in the world that is the foundation for the AI Revolution and that is Nvidia, with the Godfather of AI Jensen having the best perch and vantage point to discuss overall enterprise AI demand and the appetite for Nvidia’s AI chips looking forward.”
The Wedbush analyst forecasts Nvidia growth against the backdrop of surging capital investment (ie spending on chips and scaling infrastructure) that could reach some $550 billion to $600 billion by 2026.
"This is an AI Arms Race and what is fueling this next chapter of growth is Big Tech spending, and that is NOT slowing down into 2026 with Nvidia's bullish quarter/guidance the ultimate data point that supports this tech bull thesis," the bullish tech sector analyst said.
Ives repeated a 'Buy' recommendation, with an upgrade to his target price - moving to $230 from $210.
In Thursday's premarket, Nvidia was marked some 5% higher than Wednesday's close, pitched at $196 per share.