Nvidia has delivered an exceptionally strong revenue outlook for the current quarter, along with growth figures that beat market expectations by a wide margin. This has gone a long way toward easing equity investors’ concerns that the unprecedented global AI spending boom might soon be peaking and rolling over.

There is little doubt that, for the first time in months, global investors are once again feeling the full force of “AI conviction” — the renewed faith in AI — as capital pours back into the theme. This has fuelled a powerful rally across semiconductor names and AI application software stocks.

The last time the market experienced a shock of this magnitude was back in July, when Nvidia’s total market capitalisation surged past the 4 trillion USD mark, making it the first listed company in the world to cross that threshold.

The continued, explosive global expansion in demand for AI computing power — combined with ever-larger AI infrastructure investment projects led by the U.S. government and massive capex from tech giants on hyperscale data centres — strongly suggests that, for long-term investors who favour Nvidia and the broader AI compute supply chain, the “AI faith” trade is far from over. The super-charged rerating of leading compute names still has room to run.

This latest outlook underlines that demand for Nvidia’s AI GPU clusters remains extremely robust. These expensive, high-performance AI chips are used to train large language models such as the GPT series and to provide the immense computing power required for seemingly insatiable AI inference workloads.

Market Commentary:

Based on the latest guidance, Nvidia’s total revenue is set to be roughly ten times higher than in the same quarter three years ago. In addition, the company’s most recent net profit figure has even surpassed the combined quarterly revenue reported by its two long-standing rivals, AMD and Intel.