'Pop the champagne': Nvidia earnings take ASX tech stocks higher
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More news: Nvidia ended extended trading on the Nasdaq 5% higher after its third-quarter earnings topped market estimates.
The ASX technology sectoral index was up 4.5% at 12:30pm AEDT, with Technology One (+6.3%), Life360 (+5.6%), Xero (+5.6%), WiseTech (+5.1%) and NextDC (+4.5%) all higher.
Betashares investment strategist Hugh Lam said the result “allayed concerns around the AI bubble that's taken hold of markets in recent weeks".
What they said: “Concerns around the sustainability of the AI infrastructure build out and extended valuations had put into question a year-end rally for stocks, however strong guidance from the advanced GPU designer points to a solid AI spending environment which should be supportive for the broader semiconductor ecosystem," said Lam.
“In our view, the market's fervour for AI and its potential to increase the productive capacity of economies globally is here to stay, particularly as AI adoption rates and monetisation trends rise from here.”
Wedbush analysts commented: “With tensions growing across the Street over the last few weeks as AI bubble fears have grown and put pressure on tech stocks....tonight the markets and tech stocks got a pop the champagne moment with Nvidia's robust earnings and guidance.
“Fears of an AI Bubble are way overstated in our view...this is another validation point for the AI Revolution and our view we are in the Top of the 3rd inning of this AI game.”
Nvidia earnings, sales outlook beat expectations as AI chip demand ‘off the charts’
The news: Nvidia has reported third-quarter revenue of USD57.01 billion ($88.09 billion), up 62% year on year, and topping average estimates of USD54.92 billion, according to LSEG data.
The company has forecast Q4 revenue of USD65 billion, "plus or minus 2%", outstripping consensus estimates of USD61.66 billion.
The numbers: Data centre revenue hit USD51.2 billion for the third quarter, up 66% from a year ago. Revenue from its data centre compute (+56%), gaming (+30%), professional visualisation (+56%) and automotive (+32%) segments all saw strong gains year on year.
The chip maker posted adjusted net income of USD31.91 billion for the quarter, up 65% year on year, edging out average forecasts of USD30.62 billion.
Shares were up 2.8% to USD191.64 in extended trading on the Nasdaq at 8:25am AEDT. Shares of other major AI-related stocks — such as CoreWeave (+6.7%), Nebius (+6.5%), Micron (+3.1%), AMD (+2.9%) and Broadcom (+2.1%) — also climbed after the announcement.
The context: The company said its result was bolstered by record sales of its Blackwell graphic processing units (GPUs) and cloud solutions. It also saw record data centre revenue during the period, driven by strategic partnerships and AI infrastructure expansion.
What they said: “Blackwell sales are off the charts, and cloud GPUs are sold out,” said Nvidia founder and CEO Jensen Huang.
“Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”
The sources: Nvidia earnings release, Nvidia press release
