Nvidia Shares Surge as Strong Guidance Defies AI Growth Concerns
Nvidia shares climbed 7.2% in premarket trading on Thursday, as the chip giant’s latest revenue guidance successfully quelled investor anxiety regarding the sustainability of the artificial intelligence boom.
The bullish market reaction marks a significant turnaround for the semiconductor leader. Despite consistently meeting or exceeding quarterly estimates, Nvidia had seen its stock price decline in the immediate aftermath of its earnings reports for four consecutive quarters. Thursday’s rally suggests that shareholders are finally looking past short-term volatility to focus on the company’s long-term dominance in the AI infrastructure space.
Demand “Greater Than 70%”
Nvidia CFO Colette Kress signaled massive growth for the company, projecting a 70% revenue increase for fiscal 2028. CEO Jensen Huang offered an even more optimistic assessment, stating that actual demand is “much greater than 70%,” but growth is currently constrained by the volume of product the company can manufacture.
“This time last year, one lab alone was driving the buildout,” Huang noted. “Today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online.”
However, this reliance on external manufacturing remains a bottleneck. TSMC, Nvidia’s primary manufacturing partner, continues to grapple with supply constraints, while the global shortage of high-bandwidth memory chips—an essential component of modern AI systems—persists.
Market-Wide Sentiment Lifted
Nvidia’s strong report triggered a broad recovery across the semiconductor sector. Major chipmakers saw significant gains, with Marvell rising 5.7%, Arm 4.7%, Micron 4.5%, Intel 3%, and AMD 1.7%. Neocloud firms also participated in the rally, with Nebius and CoreWeave climbing 7.5% and 6%, respectively.
Siddy Jobe, senior portfolio manager at the Exponential Technologies Fund, argued that the results prove current valuations are attractive. “There is plenty, plenty of upside in the Nvidia share,” Jobe told CNBC’s “Squawk Box Europe.”
Strategic Expansion
Beyond hardware, Nvidia is deepening its grip on the AI ecosystem. Reports emerged this week that the company has agreed to acquire Hugging Face, a leading open-source platform for AI models, in a deal valued at $12.9 billion. If finalized, the acquisition would significantly expand Nvidia’s influence from pure chip manufacturing into the critical software and developer communities that drive AI innovation.
Despite these successes, competition is brewing. Analysts highlighted a rising “threat” to Nvidia’s near-monopoly on high-end chips as major hyperscalers and AI labs, including OpenAI, accelerate the development of their own custom semiconductors.
Regardless of these looming challengers, market experts remain largely unfazed. “I continue to be very bullish on Nvidia and this entire ecosystem,” said Paul Meeks, head of technology research at Freedom Capital Markets. “I don’t think we have really a threat of a slowdown until we get into 2028 earliest.”
