For the first time in four quarters, Nvidia’s shares rose after its earnings report. The company’s latest results seemed to ease investor concerns about its future growth.
Some investors have questioned whether Nvidia, already worth over $5 trillion, can keep growing. CEO Jensen Huang said sales could double if the company was not limited by current supply issues.
Nvidia also responded to worries that its biggest customers might start using more custom chips instead of Nvidia’s products. The company announced a bigger partnership with Amazon, which plans to use two million more Nvidia processors. This news seemed to reassure investors.
After the report, Nvidia’s shares jumped in premarket trading on Thursday.
There are still some concerns. Critics point to a likely drop in gross margin because of higher memory costs, and to Nvidia’s increased use of its balance sheet to back customer debt and give some clients more time to pay. Barron’s has said this strategy could help secure long-term demand. Nvidia’s CFO, Colette Kress, admitted some people might call this circular financing, but she said the company sees it differently and is confident about strong returns on its investments.
Nvidia is also growing beyond hardware. According to The Information, which cited a source familiar with the deal, Nvidia has agreed to buy the AI development platform Hugging Face for $12.9 billion. Nvidia did not immediately comment on the report.
