Nvidia's CEO, Jensen Huang, addressed worries about a potential decline in the boom of artificial intelligence chip spending, envisioning that opportunities will grow into a multi-trillion-dollar market in the next five years.
Huang aimed to calm investors who are anxious about signs of slowing growth at the chipmaker, which is at the heart of the current investment excitement.
Earlier in the day, Nvidia projected third-quarter revenues that matched analysts' expectations but fell short of the high hopes that have led its stock price to increase by about one-third this year.
The optimistic outlook from the founder and CEO is in contrast to recent indications of fatigue in AI-related stocks and remarks from industry leaders about high investor fervor.
Also Read: Case Study: Sri Lanka's Tourism Efflux with AI
"A new industrial revolution has begun. The AI competition is on," Huang stated. "We anticipate $3 trillion to $4 trillion in AI infrastructure investments by the decade's end."
Driving the chipmaker's stock price are expectations of demand from large technology firms, data center operators known as hyperscalers, and China.
"The major tech companies are the ones driving much of the capital expenditure that Nvidia is benefiting from. Nevertheless, Nvidia continues to grow and is able to sell," commented Matt Orton, head of advisory solutions at Raymond James Investment Management.
While Nvidia's shares have surged beyond a roughly 10 percent rise in the wider market, AI-related stocks have begun to show signs of fatigue.
OpenAI's CEO, Sam Altman, raised concerns earlier this month when he mentioned that investors might be "overexcited" about AI.
As an example, a customer outside of China purchased $650 million worth of Nvidia's H20 reduced-capability chip specifically designed for the Chinese market in the last quarter, according to the chipmaker.
Huang's forecast is partly based on the $600 billion he anticipates in data center capital expenditures this year from major clients like Microsoft and Amazon.
For a data center with a price tag as high as $60 billion, Nvidia could potentially capture around $35 billion, Huang explained.
Huang's comments contrast with a modest third-quarter sales projection of approximately $54 billion, which is slightly above the average analyst estimate of $53.14 billion compiled by LSEG.
Also Read: Artificial Intelligence Unclasps Career Opportunities in the Adtech Industry
Nvidia and Huang, however, believe that there is little reason for the profit growth of AI chips to slow, as the net income for the second quarter exceeded the fiscal third-quarter profit of major tech competitor Apple.
The company’s premium Blackwell chips have already been largely spoken for based on projections from its largest clients for 2026. Additionally, its earlier-generation Hopper processors are also being quickly acquired.