Nvidia's shares rose more than 4% following the release of its latest financial update, which reported record revenues and projected strong fourth-quarter sales ahead of Wall Street expectations. The company announced third-quarter revenues of $57 billion, a 62% increase year-over-year, and forecast fourth-quarter sales of $65 billion.
This performance eased concerns about a potential artificial intelligence (AI) stock market bubble. The results are particularly significant as investors have been closely watching Nvidia for signs of a market slowdown.
The company recently became the world's first $5 trillion company. Despite the positive update, some analysts warn of continued market volatility.
Concerns about an AI bubble have been amplified by significant investors divesting their Nvidia holdings, including Softbank and Peter Thiel, and Michael Burry disclosing a short position. Investment bank leaders have also cautioned about a potential stock market correction in the coming years, with Google CEO Sundar Pichai drawing parallels to the dot-com bubble.
Analysts note that while parts of the AI space may warrant a valuation correction, Nvidia's strong earnings growth and market dominance, particularly its integrated data center solutions, continue to support its valuation. However, key customers are exploring alternatives, posing a future challenge to Nvidia's market position.
