From Bloomberg:
Nvidia Corp (NVDA), a major maker of artificial intelligence processors, failed to impress investors with its latest sales forecast, a sign that concerns about an overheating AI economy will continue to dog the company.
Nvidia shares fell 1.5% during the analyst call, even as the chipmaker’s fourth-quarter revenue surged 73% and its first-quarter outlook handily beat Wall Street’s average forecast. The stock rose less than 1% in premarket trading Thursday.
It’s a stark reminder of the skepticism surrounding Nvidia right now. Investors are seeking stronger assurances that booming artificial intelligence sales will continue after explosive sales growth made the chipmaker the world’s most valuable company.
“Nvidia delivered solid results by most measures,” JPMorgan analysts said in a note after the results. “Even so, the stock reaction suggests investors still want more.”
Chief Executive Jensen Huang pushed back on those concerns on a conference call Wednesday, saying customers are already making money from their newfound computing power. That’s why clients will continue to invest at higher levels, he said.
“You need computing power, and that translates directly into growth, and that translates directly into revenue,” Huang said. “I believe their cash flow is growing.”
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