Nvidia Chip Demand Defies Talk Of A Slowdown

Nvidia has delivered another set of powerful quarterly results that eased investor nerves and strengthened confidence in the durability of global AI investment. The numbers showed little sign of weakness in the company’s core data centre business, despite several weeks of heavy declines in technology shares and renewed debate over whether the AI boom has pushed valuations too far.

The world’s most valuable listed company reported a 62 per cent rise in revenue to 57 billion dollars for the three months to the end of October. Analysts had expected around 55 billion dollars, according to Visible Alpha. Nvidia also issued guidance of 65 billion dollars for the current quarter, roughly 3 billion dollars ahead of consensus forecasts, indicating management sees no meaningful slowing in customer demand.

Net income rose 65 per cent to 31.9 billion dollars, again ahead of estimates. Data centre revenue, which captures the company’s AI chip sales, reached 51.2 billion dollars compared with market expectations of 49 billion dollars. The company’s ability to keep expanding sales at this pace has become a key measure of sentiment across the broader technology sector, given Nvidia’s dominance in the supply chain for advanced AI infrastructure.

Shares in the group rose 4.5 per cent in early trading on Thursday. The gains helped lift other US technology names and supported equities in Asia, where Japan’s Nikkei 225 index rose 3.7 per cent and South Korea’s Kospi gained 2.2 per cent. Investors had been braced for a weaker update following a sharp pullback in technology stocks through November, as rising costs and concerns over demand weighed on sentiment.

Chief executive Jensen Huang sought to counter talk of an AI bubble, telling analysts the company saw no evidence of speculative excess in its core markets. In recent weeks, more than 200 billion dollars has been wiped from the valuation of US technology giants as investors questioned whether the current wave of capital expenditure on chips and data centres was sustainable. Huang dismissed this, saying Nvidia’s customers continue to build long term infrastructure that will support rapid adoption of AI across industries.

The results come at a time when Nvidia is more deeply entwined with its biggest clients. A series of multibillion dollar partnership deals this year resulted in tighter collaboration between chipmakers, AI developers, and cloud providers. Nvidia has committed up to 100 billion dollars to OpenAI, prompting some analysts to warn about the increasingly circular nature of these relationships. However, supporters argue that close cooperation is necessary to accelerate innovation in semiconductors and model development.

The quarter did bring one new warning from the company. Nvidia said its customers’ ability to secure capital and energy for large scale AI data centres had emerged as a potential constraint on future growth. Many of the biggest buyers of Nvidia chips are now engaged in aggressive expansion plans, requiring enormous power supplies and significant financing. The company noted that customers with limited balance sheet strength may struggle to secure funding, which could delay some projects.

Despite this, Nvidia continues to raise its own sales outlook. The firm’s market capitalisation briefly surpassed 5 trillion dollars in late October after Huang revealed the company had booked more than 500 billion dollars in cumulative orders for its new generation of chips through to the end of next year. Colette Kress, chief financial officer, said future revenue could climb further following Nvidia’s 10 billion dollar investment in Anthropic, which will use Nvidia chips for the first time under the deal.

At an event in the United States Saudi Arabia investment forum on Wednesday, Huang announced that Elon Musk’s xAI will join Nvidia’s existing partnership with Humain, a Saudi backed AI investor. The companies are working on a 500 megawatt data centre in the kingdom that will run on Nvidia hardware. The US Commerce Department also confirmed it had approved the export of Nvidia’s Blackwell chips to Humain and G42, the main AI group in the United Arab Emirates, after internal debate over potential technology leakage to China.

Nvidia has grown strongly despite being effectively locked out of China’s data centre market. The company’s H20 chip, designed to comply with US export controls, generated insignificant revenue during the quarter due to restrictions on sales and pressure from Beijing on Chinese firms to shift to domestic alternatives. Nvidia did not include any potential China related income in its guidance.

The company said demand for last year’s Blackwell chips remained strong even as shipments of its successor, Blackwell Ultra, increased. Nvidia expects its gross margin to reach 75 per cent this quarter, in line with previous guidance, after a slight dip earlier in the year linked to the cost of launching its newest technology. Kress said Nvidia aimed to hold margins at roughly the same level through 2026, even as it prepares to roll out its next chip generation, named Vera Rubin.

The resilience of Nvidia’s performance has become a crucial indicator for investors trying to assess the true strength of the AI sector. Several high profile voices, including well known short seller Michael Burry, have warned in recent months that the industry is overheating. SoftBank’s decision this month to sell its 5.8 billion dollar stake in Nvidia also unsettled the market. Yet many analysts argue that the company is still early in a multi year investment cycle driven by corporations, governments, and research institutions seeking to adopt increasingly powerful AI systems.

Daniel Newman, chief executive of research group The Futurum Group, said the latest results showed momentum remained intact. He added that while the scale of demand is hard to believe, the consistency of Nvidia’s performance suggests doubters will need to reconsider their assumptions. Others point to the continued flow of infrastructure announcements across the United States, Europe, the Middle East, and Asia, all of which rely heavily on Nvidia hardware.

Still, sceptics caution that heavy capital spending by cloud providers cannot rise indefinitely. Several of the largest buyers of Nvidia chips are running large cash burn rates as they race to build global AI compute networks. Some analysts expect a cooling period in 2026 as companies pause to assess usage, optimise existing capacity, and address energy constraints.

For now though, Nvidia’s latest figures show little sign of fatigue in the market for advanced chips. The company remains central to the global AI supply chain and its results continue to set the tone for technology markets worldwide. Investors will now watch closely to see whether demand can keep pace with the enormous capacity being built across the data centre industry, or whether the first signs of constraint appear as competition intensifies and regulatory scrutiny tightens.