Nvidia Stock Surges as Sales Forecast Delivers on AI Hopes

Nvidia Corp. experienced a significant surge in its stock value following a bullish sales forecast, indicating strong ongoing spending in AI computing. The company projected a second-quarter revenue of about $28 billion, surpassing analysts' expectations of $26.8 billion. This forecast, along with first-quarter earnings that also exceeded projections, fueled optimism about Nvidia's robust growth in its data-center division.

CEO Jensen Huang highlighted the advent of a "new industrial revolution" driven by AI, enhancing investor excitement. Nvidia's shares jumped by up to 10%, significantly boosting its market valuation. The company's focus on AI accelerators for data centers has paid off, making its chips highly sought after for developing advanced AI applications. This strategic positioning has allowed Nvidia to dominate the AI spending market, with its valuation soaring above $2.3 trillion.

In the fiscal first quarter, Nvidia's data-center division performed exceptionally well, with revenue more than tripling to $26 billion. This growth was driven by strong demand for the company's AI accelerators, which help data centers develop chatbots and other cutting-edge tools. The data-center division, now the largest source of sales for Nvidia, generated $22.6 billion in revenue during the quarter, surpassing analysts' expectations of $21 billion. This growth was fueled by a surge in demand for generative AI training and inference on the Hopper platform, as well as the expansion of generative AI to consumer internet companies, enterprise, sovereign AI, automotive, and healthcare customers.