Key facts
- Nvidia forecasts third-quarter revenue of $108.0 billion, exceeding analysts' average estimate of $104.19 billion.
- The company expects continued heavy spending on AI chips from major technology firms.
- Big Tech companies are projected to spend over $730 billion on AI infrastructure this year.
- Nvidia's revenue opportunity for AI chips is estimated to exceed $1 trillion through 2027.
- Nvidia announced a $17 billion deal for technology from inference-focused startup Groq.
Nvidia forecast quarterly revenue above Wall Street estimates, indicating sustained high spending by major technology companies on its artificial intelligence chips, even as many develop their own.
The company expects third-quarter revenue to be $108.0 billion, plus or minus 2%, surpassing analysts' average estimate of $104.19 billion. Nvidia stated that its outlook does not include any sales of data center chips from China.
Nvidia's results are closely watched as a key indicator for the AI market, given its chips power most major data centers and advanced AI models globally. This forecast follows recent statements from companies like Microsoft and Meta, which indicated that Big Tech plans to invest over $730 billion in AI infrastructure this year, a significant increase from the previous year's $400 billion outlay.
However, a growing portion of this planned spending is directed towards in-house chip development aimed at reducing reliance on Nvidia's expensive and supply-constrained processors. Rivals such as Intel and AMD are also targeting the inference market, with Chinese firms like Baidu already producing their own chips for these tasks.
In response, Nvidia unveiled a new central processor and AI system in March, incorporating technology licensed from inference-focused startup Groq in a $17 billion deal. The company's market leadership was further underscored by SpaceX CEO Elon Musk's announcement that his company would exclusively use Nvidia's hardware.
Nvidia has projected that the revenue opportunity for its AI chips could surpass $1 trillion through 2027. Separately, HP Inc. projected fourth-quarter profit above estimates, driven by price increases on premium and AI-powered PCs and tariff refunds, which are expected to offset rising memory chip costs.