Nvidia (NVDA) reported better-than-expected fiscal fourth-quarter results, beating Wall Street expectations and guiding first-quarter revenue above forecasts. But investors paid even closer attention to what NVDA CEO Jensen Huang said on the earnings call, as he addressed growing concerns about whether the surge in AI spending can last.
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Forget margin or options. Here's how the pros trade AMZNHuang signaled that demand is not fading. Instead, he suggested companies are beginning to use AI systems in everyday operations, which could keep the need for computing power high and support continued spending on Nvidia’s chips.
Huang Pushes Back on AI Concerns
Investors have recently worried that AI hardware spending could slow and that AI tools might hurt software companies. Huang directly addressed those fears, saying, “I think the markets got it wrong.”
He explained that AI systems will not replace business software. Instead, they will rely on existing programs to complete tasks. In his view, AI agents act more like users of software than competitors to it.
Huang also explained why companies may keep needing more computing power. Once companies begin using AI systems in daily operations, computing demand does not stop after the models are built. It continues as long as the systems are used. Huang summed it up by saying, “In this new world of AI, compute equals revenues.”
Why Big Tech Spending Matters
The earnings report showed that hyperscale cloud providers accounted for slightly more than half of Nvidia’s data center revenue. These customers include Amazon (AMZN), Microsoft (MSFT), Meta (META), and Alphabet (GOOGL).
These companies are investing heavily in AI services, which need large amounts of computing power. As they expand those offerings, they will keep purchasing Nvidia chips, supporting steady demand.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Nvidia stock based on 34 Buys, zero Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average Nvidia price target of $267.48 per share implies 36.78% upside potential.
