Nvidia rises after signaling longer AI spending runway

Nvidia shares rose before the ​bell on Thursday as investors embraced the chipmaker's ​strong long-term outlook, betting that ‌a global race ​to build AI infrastructure will fuel years of rapid growth despite concerns about supply bottlenecks and financial ties with customers.

Shares rose 6.7% ‌to $223.71 before the bell, putting Nvidia on track to add about $340 billion to its market value. The world's most valuable company projected 70% revenue growth next fiscal year and forecast current-quarter sales above Wall Street estimates, ‌signaling that the AI spending boom remains intact.

The upbeat outlook rippled through global semiconductor markets, sending AI-linked ‌stocks higher in Europe and China and offering fresh ammunition to bulls. Nvidia's shares have fallen nearly 12% from their May peak amid growing investor demands for evidence that the AI spending boom would endure.

Following the results, at least 10 brokerages ⁠raised ​their price target on the ⁠shares, according to data compiled by LSEG. Analysts at Morgan Stanley said, "70% growth supply constrained is a remarkable figure, and to ⁠the extent possible we would expect Nvidia to continue to knock down barriers to higher growth."

The forecast marked a ​rare long-term outlook from Nvidia, with CEO Jensen Huang saying AI had reached an "inflection point" ⁠as the technology moves from experimentation to real-world deployment. Nvidia signaled that AI demand is spreading beyond hyperscalers, citing growth from AI ⁠labs, ​rising capacity among neo-cloud providers such as CoreWeave and Nebius, and a deeper partnership with Amazon Web Services.

Shares of CoreWeave and Nebius rose 5.8% and 7.2%, respectively. Morgan Stanley analysts said that ⁠Nvidia's push into cloud revenue-sharing could become a fresh catalyst for the stock.

The company reported second-quarter revenue ⁠of $96.2 billion, ahead of ⁠Wall Street expectations, driven by $89 billion in data center sales. The stock trades at 17.9 times forward earnings estimates, well below Advanced Micro Devices' 37.2 times ‌and Intel's 46.2 ‌times.