Nvidia shares rose 6.7% to $223.71 before the bell, putting the chipmaker on track to add about $340 billion to its market cap. The jump followed a forecast of 70% revenue growth next fiscal year and current-quarter sales above Wall Street estimates. At least ten brokerages raised their price targets on the stock afterward.
Nvidia shares rose 6.7% to $223.71 before the bell on Thursday as investors embraced the chipmaker's long-term outlook. They are betting a global race to build AI infrastructure will fuel years of growth despite concerns about supply bottlenecks and financial ties with customers.
Nvidia forecasts 70% revenue growth
The world's most valuable company projected 70% revenue growth next fiscal year and forecast current-quarter sales above Wall Street estimates, signaling the AI spending boom remains intact. Nvidia reported second-quarter revenue of $96.2 billion, ahead of expectations, driven by $89 billion in data center sales. The forecast marked a rare long-term outlook from Nvidia, with CEO Jensen Huang saying AI had reached an "inflection point" as the technology moves from experimentation to real-world deployment, according to Reuters.
AI-linked stocks rally worldwide
The outlook rippled through global semiconductor markets, sending AI-linked stocks higher in Europe and China and offering fresh ammunition to bulls. Nvidia's shares had fallen nearly 12% from their May peak amid growing investor demands for evidence the AI spending boom would endure. Following the results, at least 10 brokerages raised their price target on the shares, according to data compiled by LSEG.
Demand spreads beyond hyperscalers
Nvidia signaled that AI demand is spreading beyond hyperscalers, citing growth from AI labs, rising capacity among neo-cloud providers such as CoreWeave and Nebius, and a deeper partnership with Amazon Web Services. Shares of CoreWeave and Nebius rose 5.8% and 7.2%, respectively.
Despite the rally, Nvidia trades at 17.9 times forward earnings estimates, well below Advanced Micro Devices' 37.2 times and Intel's 46.2 times. Morgan Stanley analysts said Nvidia's push into cloud revenue-sharing could become a fresh catalyst for the stock.
Source: Investing.com
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