Nvidia's surging profits dispel AI gloom, giving Wall Street a sense of reassurance.

Xiao Yanyan, Jinshi Data

Nvidia (NVDA) delivered record sales results and strong guidance on Wednesday, easing concerns about an artificial intelligence bubble that had been lingering in the market for the past week.

Driven by a continued surge in demand for high-end AI data center chips, the company's October quarterly sales reached a record high of $57 billion, a 62% increase year-over-year, and exceeded the consensus expectations of analysts surveyed by FactSet.

The company also raised its quarterly guidance, estimating sales at $65 billion, compared to analysts' previous revenue forecast of $62.1 billion for the quarter.

Shares of the world's most valuable publicly traded company rose more than 6% in after-hours trading on Wednesday.

"We've entered a virtuous cycle in AI," said Nvidia CEO Jensen Huang. "AI is permeating every corner, handling all tasks simultaneously." Wednesday's earnings brought a sigh of relief to investors. With the rise of the AI ​​boom, Nvidia's quarterly earnings reports are considered a kind of "Super Bowl" for the financial world. The company is seen as a bellwether for the health of the tech industry and even the overall market. However, market sentiment this earnings season has been particularly tense—few companies' earnings reports have generated such anxious anticipation. In recent weeks, investors have been selling off large-cap tech stocks, worried that companies are overly aggressive in their investments in data centers, chips, and other infrastructure as they race to develop and operate the most powerful AI models, making it difficult to recoup their investments in the short term. Adding to the pressure is the recent surge in AI deals employing a structure critics call "circular" financing—where suppliers like Nvidia make large-scale capital investments in their customers who purchase their products. Months ago, investors enthusiastically embraced such deals, driving up the stock prices of many AI-related companies. However, similar deals reached this week between Nvidia and Microsoft and Anthropic have raised market concerns. A Bank of America survey this week showed that 45% of global fund managers believe an AI stock market bubble is one of the major risks facing the market. The bearish moves of several prominent investors have also shaken the tech market. Last week, Masayoshi Son's SoftBank Group sold off its $5.8 billion Nvidia stake to invest in other AI areas; and Peter Thiel's hedge fund also liquidated its $100 million Nvidia holdings in the third quarter. Earlier this month, Michael Burry, known for his accurate predictions of the subprime mortgage bubble burst and featured in Michael Lewis's "The Big Short," disclosed in regulatory filings that he was shorting shares of Nvidia and Palantir, a defense analytics firm heavily invested in AI. "The cracks in the AI ​​space have become increasingly apparent in recent weeks," said Matt Stucky, an Nvidia shareholder and head of equity portfolios at Northwestern Mutual Wealth Management Company. "Nvidia is a major beneficiary of AI spending, and market forces are increasingly retaliating against that spending." Nvidia's quarterly net profit reached $31.9 billion, a 65% year-over-year increase. Jensen Huang stated that sales of the new generation Blackwell series graphics processors (currently the most powerful chip) are "exploding." Data center revenue hit a record $51.2 billion, exceeding analysts' expectations of $49 billion. Nvidia's stock price surged from a low of $90 in early April to over $200 by the end of October, more than doubling in value. However, it has given back some of those gains in recent weeks due to bubble concerns. Year-to-date, it is still up approximately 30%.