Nvidia beats expectations and increases profits by 65%

BarcelonaUS microchip giant Nvidia, considered the world's largest company by market capitalization, exceeded analysts' expectations in the third quarter and announced on Wednesday evening an increase in profits and revenue. The earnings report was one of the most anticipated in recent months, as it was expected to provide clues about the company's health, which has recently suffered a drop in market value, and about the artificial intelligence (AI) industry at a time of growing speculation about a possible bubble. Specifically, the US company reported a net profit of $31.91 billion during the third quarter of the fiscal year, representing a 65% increase compared to the previous year. The company, a leader in the field of AI, released the results after the close of trading on Wednesday, with quarterly revenue of $57.006 billion, a 62% increase year-over-year. Data centers are the main driver of activity, generating $51.215 billion in revenue. These results exceed all expectations and, according to the company, dispel fears of an AI bubble bursting.

"We have entered the virtuous cycle of AI. The AI ecosystem is growing rapidly, with more creators of new foundational models, more start-ups"AI is arriving everywhere, doing everything, and suddenly, in more industries and in more countries," the company's CEO, Jensen Huang, said in a statement. The Taiwanese-American executive's words contrast with growing fears in the markets: "There's a lot of talk about an AI bubble. From our privileged position, we see it very differently," Huang added on Wednesday, speaking at a conference with analysts, as reported by the British newspaper. Financial Times.

In recent months, reports about this potential bubble have appeared with increasing frequency in financial media worldwide. A significant number of analysts believe that the enormous revenue, profit, and investment prospects of companies in the sector are becoming less and less credible and that, consequently, the share prices of multinational corporations in the sector are inflated. For example, the shares of the ten largest companies in the AI industry already represent half the total value of the North American stock market. The US economy would not have grown This year, if it weren't for the data center investments these companies have made.

In this sense, the company's third-quarter results were especially anticipated in the markets, providing more information on the financial state of the leading company in the AI industry. In the second quarter, the company led by Jensen Huang doubled the profits Compared to the same period last year, however, despite the good news, the share price fell, as investor expectations were not met, as they had anticipated even higher growth. Currently, the company's shares are up more than 5% during the afternoon session of the US market.

The world's largest company

Nvidia is the world's largest publicly traded company, with a market capitalization of $4.5 trillion. The chip manufacturer It reached a record figure of 5 trillion last month.However, in recent weeks its shares have fallen by more than 11% due to growing fears among investors and analysts about a speculative bubble in the artificial intelligence sector. Nevertheless, it has seen a 25% increase over the last twelve months.

In fact, the danger of a bubble in the industry has caused some headaches for the management of the microchip giant. The latest bad news was the recent departure of Softbank, the Japanese technology investor, which sold off a stake in Nvidia's capital valued at around €5 billion. This transaction follows one by Thiel Macro, the investment fund led by PayPal founder Peter Thiel, who also sold his Nvidia shares, valued at around $100 million.