Nvidia, the company that sells nearly 90 per cent of chips used for artificial intelligence, reported profit of $31.9 billion for the last quarter, up 65 per cent year on year and 245 per cent from the year before that. Only Google’s parent company, Alphabet, made more money in the same quarter, according to The New York Times.
The strong showing may ease recent jitters about a Big Tech boom turning into a bust that topples the world's most valuable company. Nvidia CEO Jensen Huang touted blockbuster demand for its AI chips from giant cloud providers and shrugged off concerns about an AI bubble.
The results announced late Wednesday provided a pulse check on the frenzied spending on AI technology that has been fuelling both the stock market and much of the overall US economy since OpenAI released its ChatGPT three years ago.
Nvidia has been by far the biggest beneficiary of the run-up because its processors have become indispensable for building the AI factories that are needed to enable what's supposed to be the most dramatic shift in technology since Apple released the iPhone in 2007.
But in the past few weeks there has been a rising tide of sentiment that the high expectations for AI may have become far too frothy, setting the stage for a jarring comedown that could be just as dramatic as the ascent that transformed Nvidia from a company worth less than $400 billion three years ago to one worth $4.5 trillion today.
Nvidia's report for its fiscal third quarter covering the August-October period now seems likely to elicit a sigh of relief among those fretting about a worst-case scenario.
The company's stock price gained more than 2 per cent in Wednesday's extended trading after the numbers came out.
A relief rally swept across Asian markets and lifted stocks in early trading Thursday as investors cheered Nvidia's market-topping earnings.
Nvidia "delivered yet another master class in AI dominance," said Tony Sycamore, market analyst at IG in Sydney.