“It doesn’t happen often to see a $700 billion company move 25% in one day — I’ve never seen anything like it,” said Richard Windsor, founder of independent researcher Radio Free Mobile based in Abu Dhabi. For as long as the AI craze persists, “Nvidia is in a good position.”

A trillion dollars of data center infrastructure will be upgraded to handle so-called accelerated computing, Chief Executive Officer and co-founder Jensen Huang told analysts, letting them run generative AI tools such as ChatGPT. Huang said the firm saw “incredible orders.”

Nvidia’s outlook was so strong that Morgan Stanley analyst Joseph Moore said the numbers match what they had in mind for 2025. “The transformational surge in AI spending is paying off much earlier than expected,” he wrote in a note.

Eoin Treacy's view

There is no arguing with the size of the sales beat by Nvidia. It is truly impressive. Of course, it begs the question who is buying? The company announced in late March they have altered the best-selling H800 chip, so it will comply with prohibitions on selling high tech to China. The upshot is a Chinese company will need more of these chips to achieve the same efficiency. That’s likely to have been a significant factor in the jump in Nvidia’s sales. 

The share leaped higher in afterhours trading to post a new all-time high. There is no question the valuation is bubbly. However, there is no sign that the expansion has ended either. AMD, as Nvidia’s chief competitor also leapt higher today.
The FANGMANT/Total NYSE Market Cap ratio hit a new all-time today at 23.27%. That’s eight companies representing almost a quarter of the total market’s valuation.

Meta, Amazon, Nvidia, Alphabet, Microsoft, Apple, Netflix, and Tesla remain some of the biggest beneficiaries from the evolution of broadband, cloud, and deep learning/AI. They have weathered the jump in rates admirably and the big question is how they will perform when consumer demand rolls over during a recession. 

Attention is now turning towards Apple’s product launch next month. The expectation is they will deliver a new mixed reality AR/VR headset to the price insensitive early adopter community with the aim of perfecting the product over subsequent iterations. The question many are curious about is how an AI power chatbot can interact with an internet connected headset to improve person productivity.
Apple is testing the upper side of an 18-month range and needs a positive catalyst if the share is to sustain a breakout.