Nvidia jumps 6% in premarket trading after blockbuster earnings boost AI confidence
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- Nvidia shares rose 5.95% in premarket trading on Thursday, recouping confidence after chip stocks shed roughly $1 trillion in value during July's correction.
- CFO Colette Kress guided for 70% revenue growth in fiscal 2028 (February 2027 to January 2028), with CEO Jensen Huang stating actual demand 'is much greater than 70%' but capped by supply constraints.
- TSMC, Nvidia's primary manufacturer, continues to face supply constraints, while memory chips — a critical component in Nvidia's systems — also remain in short supply.
- Nvidia's AI Clouds, industrial, and enterprise (ACIE) segment generated $40.3 billion in quarterly sales, up 138% year-over-year, demonstrating customer diversification beyond the top hyperscaler buyers.
- Analysts flagged a competitive 'threat' to Nvidia's near-monopoly on advanced AI chips from custom semiconductors recently announced by hyperscalers and AI labs, including OpenAI.
- Huang declared AI 'reached its inflection point,' noting the customer base has widened from 'one lab alone' driving buildouts to 'multiple frontier labs scaling in parallel' alongside physical AI and open-model ecosystems.
- Siddy Jobe of Exponential Technologies Fund told CNBC the earnings show Nvidia's valuation is 'cheap' with 'plenty, plenty of upside,' while Paul Meeks of Freedom Capital Markets said he sees no slowdown threat 'until we get into 2028 earliest.'
Why it matters: Nvidia's 138% surge in its ACIE segment — non-hyperscaler revenue hitting $40.3 billion in a single quarter — directly addresses investor fears that AI capex is a circular bubble, by proving real enterprise and industrial demand is scaling fast enough to justify the $1 trillion-plus market valuation.
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