Nvidia Corp (NASDAQ: NVDA, XETRA: NVD) shares surged 8.7% on Thursday, adding about US$441.5 billion to the chipmaker’s market value after its latest quarterly results comfortably beat Wall Street forecasts and reinforced expectations that the artificial intelligence infrastructure boom still has considerable room to run.
The stock closed at US$227.98 on August 27, lifting Nvidia’s market capitalisation to around US$5.49 trillion and delivering the company’s largest-ever one-day increase in market value.
The rally followed second-quarter revenue of US$96.2 billion, up 106% from a year earlier and ahead of analyst expectations of around US$92.3 billion.
Adjusted earnings reached US$2.22 per share compared with the US$2.09 analysts surveyed by FactSet had expected.
Data centre revenue more than doubles
Nvidia’s data centre business remained the main engine of growth, generating US$89 billion of revenue during the three months to July 26 — an increase of 117% year-on-year.
Chief executive Jensen Huang said demand for AI computing was accelerating as more frontier AI laboratories, startups and open-model developers scaled their infrastructure.
“AI has reached its inflection point,” Huang said, adding that the global AI infrastructure buildout was at “full steam”.
Nvidia’s next-generation Vera Rubin platform has now entered full production, with infrastructure running at partners including Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure, CoreWeave and Nebius.
Forecast also clears Wall Street hurdle
Perhaps more important for investors was Nvidia’s outlook.
The company expects third-quarter revenue of US$108 billion, plus or minus 2%, compared with analyst expectations of about US$104.9 billion. The forecast assumes no data centre computing revenue from China.
Management also indicated that Vera Rubin could account for around 20% of third-quarter data centre revenue, while preliminary expectations point to revenue growth of around 70% in the following financial year.
Supply remains a constraint, however, while higher component costs are expected to put pressure on margins. Nvidia forecasts gross margins of around 74% in the current quarter, with margins potentially bottoming at 71% to 72% in the following quarter.
Even so, the market response suggests investors remain focused on the extraordinary pace of AI infrastructure spending.
Thursday’s rally took Nvidia to its second-highest closing share price on record and provided another reminder of the chipmaker’s outsized influence over the broader technology market, with semiconductor stocks rallying alongside it.
Hugging Face acquisition
Meanwhile, Nvidia is reportedly closing in on a roughly US$13 billion acquisition of Hugging Face, in what would significantly expand the semiconductor giant’s reach beyond AI chips and deeper into the software and developer ecosystem.
Reports on August 27 said Nvidia had either agreed to acquire the open-source artificial intelligence platform for around US$12.9 billion or was in advanced discussions. However, neither Nvidia nor Hugging Face has publicly confirmed a completed transaction.
The potential deal would represent one of Nvidia’s largest acquisitions and give the company control of one of the most important platforms used by developers to distribute, download and modify AI models.