Nvidia earnings top expectations with "off the charts" chip demand

Driving the news: The company posted third-quarter revenue of $57 billion, up 62% compared with a year earlier, while net income soared 65% to $31.9 billion.

• S&P Capital IQ analysts had expected revenue of $55.1 billion and net income of $29.2 billion.
• Nvidia is forecasting about $65 billion in sales for the fourth quarter, higher than what Wall Street was estimating.

Zoom in: Huang outlined a bullish case for AI and Nvidia's role in its acceleration, rejecting critics who have said it's too much too soon.

• "There's been a lot of talk about an AI bubble," he said on the company's earnings call. "From our vantage point, we see something very different."
• CFO Colette Kress said Nvidia is expecting global annual spending on AI infrastructure of $3 trillion to $4 trillion by the end of the decade.

"Blackwell sales are off the charts, and cloud GPUs are sold out," Huang said in a statement. "Compute demand keeps accelerating and compounding across training and inference — each growing exponentially."

• He added: "We've entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once."

The big picture: The earnings report comes amid growing concern about an AI bubble, fueled by companies investing in and buying from each other.

• Nvidia shares — and the broader stock market — had slipped in recent days amid debate over whether investors have gotten too bullish on the AI trade.
• They had risen 2.9% Wednesday, however.

What we're watching: Axios' Maria Curi reported earlier Wednesday that key White House officials are pressing lawmakers on Capitol Hill to keep AI chip export restrictions to China out of the annual defense policy bill, citing four sources familiar with the matter.

• Nvidia would win big if the GAIN AI Act doesn't make it into the final version of the National Defense Authorization Act.
• Kress said on the earnings call that Nvidia is not projecting any data center revenue from China in the fourth quarter but reiterated that the company believes it's essential to America's AI future that the company be allowed to sell there.

The impact: The stock — which now represents about 8% of the S&P 500 — jumped over 6% in after-hours trading following the results as of 5pm ET.

• "With tensions growing across the Street over the last few weeks as AI bubble fears have grown and put pressure on tech stocks....tonight the markets and tech stocks got a pop the champagne moment with Nvidia's robust earnings and guidance," Wedbush Securities analyst and tech bull Dan Ives wrote in a research note.

This article was updated with additional information from Nvidia's earnings call.