Nvidia's Record Earnings Surpass High Expectations Amid AI Boom

Nvidia's latest earnings report shows $30.04 billion in revenue, a 122% increase from last year. The company's market capitalization stands at $3.1 trillion, making it the third largest globally. Its stock has risen by 167% over the past year.

Earnings per share were $0.68, exceeding analysts' expectations of $0.64. Nvidia also announced a $50 billion stock buy-back plan.

Nvidia's GPUs play a critical role in AI development, with major tech companies like Microsoft, Amazon, Meta, and Google relying on its chips. The growing demand for AI is driving increased capital spending.

Wedbush analyst Dan Ives describes Nvidia's earnings as "the most important week for the stock market this year." He estimates that every $1 spent on Nvidia's GPU chips yields an $8-$10 multiplier effect.

Annual investment in AI totals $100 billion, but profits have yet to be realized. Nvidia's next-generation AI chips, Blackwell, have been delayed by several months.

The US Department of Justice has launched an antitrust investigation into Nvidia, following accusations from rival chipmakers that Nvidia is abusing its market dominance.

Investors are drawing parallels between the current AI boom and the late 1990s Internet bubble. However, Ives contends that the situation is more similar to 1995, before the bubble burst.