Nvidia CEO predicts 'crazy good' fourth quarter after strong earnings calm AI bubble fears

Nvidia CEO Jensen Huang said Wednesday the chipmaker is heading into a "crazy good" fourth quarter, underscoring its dominance at the heart of the global artificial intelligence boom.

In an interview on FOX Business Network’s "The Claman Countdown" following stronger-than-expected third-quarter earnings, Huang said he expects the momentum to carry into the next quarter.

"We guided to a much larger quarter next quarter," Huang said. "And so the guidance that we provided is crazy good — I would agree with that. But we're in the beginning of a very long-term build-out of the fundamental infrastructure of humanity, which is computing."

Huang added that the California-based company is leading a transformation in computing.

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"We reinvented computing for the first time in 60, 70 years," he said. "And so all of the computers that have been installed around the world is being modernized to accelerated computing and video GPUs and to artificial intelligence. And so this build-out is going to last us many years to come."

Nvidia’s chief executive also addressed concerns about "circular" deals — the idea that the chipmaker could invest in companies like OpenAI, which may in turn use that funding to buy Nvidia's chips.

"First of all, we haven't given a penny yet," Huang said. "And all of the revenues that we're projecting for next quarter and for next year — if you just think about the level of investment that we would make in each tranche, and none of it is forecasted at the moment in the $500 billion that I'm talking about — the investments that we're making is a tiny percentage of our overall revenues."

Huang added that OpenAI and other leading AI companies, including Anthropic and xAI, do not depend on Nvidia's investment.

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"They have to go raise the vast majority of the funding that they have — that they need," he said. "It's raising through equity, through other investors, and of course, every single round has been oversubscribed for OpenAI and for Anthropic and for xAI. They've been all oversubscribed. They certainly don't need our investment."

Earlier Wednesday, Huang shrugged off concerns about an AI bubble as the company surprised Wall Street with accelerating growth after several quarters of slowing sales.

The chipmaker's stellar third-quarter earnings and fourth-quarter forecast calmed, at least temporarily, investor nerves over concerns an AI boom has outrun fundamentals. 

Global markets have looked to the chip designer to determine whether investing billions of dollars in AI infrastructure expansion has resulted in an AI bubble.

He reiterated a forecast from last month that the company had $500 billion in bookings for its advanced chips through 2026.

Shares of the AI market bellwether jumped 5% in extended trading, setting up the company to add $220 billion in market value. 

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Ahead of the results, doubts had pushed Nvidia's shares down nearly 8% in November, after a surge of 1,200% in the past three years.

The broader market has declined almost 3% this month.

After the results, S&P 500 futures rose 1%, showing traders expect the U.S. stock market to open sharply higher on Thursday.

The world's most valuable company said it expected fiscal fourth-quarter sales of $65 billion, plus or minus 2%, compared with analysts' average estimate of $61.66 billion, according to data compiled by LSEG. 

It forecast an adjusted gross margin of 75% for the period, plus or minus 50 basis points, and Nvidia's finance boss Colette Kress said the company plans to hold gross margins in the mid-70% range during fiscal 2027.

Nvidia's third-quarter sales rose 62%, their first acceleration in seven quarters. Sales in the data-center segment, which accounts for a majority of Nvidia's revenue, grew to $51.2 billion in the quarter ended October 26. Analysts expected sales of $48.62 billion.

Nvidia's fortunes pushed up shares of rival AMD, as well as those of tech giants including Alphabet and Microsoft. 

The chipmaker, viewed as the poster child for artificial intelligence, is heavily represented in about 673 various ETFs, according to Seeking Alpha.

Funds which hold a high concentration, between 21% to 27% of the tech giant, include VanEck Semiconductor, Strive U.S. semiconductor ETF and Grizzle Growth ETF.

As for the broader S&P 500, Nvidia is the largest stock in the benchmark, according to the S&P 500 Dow Jones Indices. Thus, funds that track the S&P 500 must mirror it.

Hence, a handful of the largest ETFs by size also count Nvidia as a top holding, including Invesco’s QQQ at 10%, SPDR S&P 500 ETF and Vanguard’s S&P 500 ETF both at 8%.

Shares of Nvidia have advanced 35% this year, outpacing the 13% rise in the S&P 500.

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Watch the full interview Thursday on FOX Business Network’s "The Claman Countdown" at 3 p.m. ET.

Reuters contributed to this report.