Nvidia rises after signaling longer AI spending runway
FILE PHOTO: The NVIDIA logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
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Aug 27 : Nvidia shares rose about 6 per cent 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.
The world’s most valuable company projected 70 per cent revenue growth next fiscal year and forecast current-quarter sales above Wall Street estimates, signaling that the AI spending boom remains intact.
The forecast offers fresh ammunition to bulls after Nvidia’s shares fell nearly 12 per cent from their May peak as investors increasingly demanded evidence that the AI spending boom would last.
Following the results, at least 10 brokerages raised their price target on the shares, according to data compiled by LSEG.
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Analysts at Morgan Stanley said, “70 per cent 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 AI demand is broadening beyond hyperscalers, citing growth from AI labs, expanding capacity at firms such as CoreWeave and Nebius, and a deeper partnership with Amazon Web Services.
Morgan Stanley 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.
Source: Reuters
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