Nvidia adds jet fuel to AI optimism with record results, $25bln buyback

Nvidia far exceeded expectations with its quarterly revenue forecast on Wednesday as an artificial-intelligence boom fueled demand for its chips and said it would buy back $25 billion in stock, sending its shares soaring after hours.

Nvidia’s forecast beat expectations by billions of dollars, demonstrating that a boom in generative AI technologies that can read and write in human-like ways – and powered almost exclusively by Nvidia’s chips – shows no signs of slowing down.

Nvidia’s additional $25 billion in share repurchases announced on Wednesday come as shares have already tripled this year, making the company the first ever trillion-dollar chip business as investors bet Nvidia will be the key beneficiary of the AI boom.

Analysts have estimated that demand for Nvidia’s prized AI chips is exceeding supply by at least 50%, adding that the imbalance will stay in place for the next several quarters.

“Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” Jensen Huang, Nvidia’s chief executive, said in a statement.

Shares of Santa-Clara, California-based Nvidia rose 9.6% in trading after the bell, hitting an all-time high.

But it was the company’s entire AI systems, not just its chips, that were the largest contributor to the quarter’s growth, according to its executives. Although known for its graphics processing units (GPUs), Nvidia produces whole AI machines with memory chips from other suppliers and tens of thousands of other parts.

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