High Income Expectations from Nvidia Boost Confidence in Markets

Nvidia's Fourth Quarter Revenue Expectations

Nvidia announced that it expects its fourth quarter revenue to be $65 billion due to high demand for artificial intelligence chips. This expectation is significantly above the average forecast of $61.66 billion from Wall Street analysts. This situation represents a critical moment for the markets as they reevaluate the value of billions of dollars invested in artificial intelligence infrastructure.

Previously, after uncertainties in the market, Nvidia shares experienced an 8% drop in November. However, despite this drop being noteworthy after a 1,200% increase over the last three years, analysts predict that the fundamental demand for artificial intelligence chips will continue since the launch of ChatGPT in late 2022.

Nvidia CEO Jensen Huang stated last month that the company has reserved $500 billion for advanced chips by 2026. This comes at a time when major technology companies are increasing their spending to expand artificial intelligence data centers in order to acquire advanced and expensive chips.

Microsoft reported last month that it made a record $35 billion capital expenditure for its fiscal first quarter. It was noted that about half of this expenditure was primarily on chips. This situation increases confidence in growth expectations related to artificial intelligence technology for Nvidia and similar companies.